DO YOU EXPECT MORE BANKS TO GO SOUTH?
Last week's national GlobeSt.com Quick Poll asked readers if they expect to see more banks going 'south.' An overwhelming 84% majority said yes. Kirk Felici, regional manager for Marcus & Millichap out of the Miami office, weighs in on the topic and its effect on the Florida office market below;
"I don't think we've seen it all yet. There was a lot of bad lending practices out there, and now it's all catching up. Even though most of that was on the residential side, it's impacting the commercial side.
"It's also causing the displacement of lending and mortgage brokers. I'm personally getting resumes from displaced mortgage brokers to become commercial real estate brokers. They have a nexus in the real estate industry and there are no jobs in the mortgage industry right now.
"In terms of the Florida office market, we're not as big as Chicago or New York in regards to the financial industry, but we do have our place in the financial world. Vacancies are going to go up because of the downsizing on the lending side, whether it's mortgage lending or direct bank lending.
"You're going to see concessions coming back in. Also with new space coming online and the vacancies trickling up—although not in a panic scenario—you're back to a fundamental supply and demand equation. As supply increases or demand decreases rents are going to start to hover, be stagnant, or many even go backwards slightly. Concessions will have to make up for that.
"The vacancies will get absorbed, but the question is, how long is it going to take before the banking industry gets solvent and strong? During one of the last banking crisis in the early 90s, the space took years to be absorbed. I think this time will be quicker than that, but you're not going to see it absorbed in the next six months."
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