South Florida CRE to Continue Plunge in 2009

(Crystal Proenza is associate editor of Real Estate Florida.)

MIAMI-Limited debt availability and declining property values will cause the South Florida commercial real estate market to continue its downward trajectory, at least for the first two quarters of 2009, according to local experts. Plunging values may begin to stabilize in the third quarter, but property fundamentals may continue to deteriorate based on unemployment. Although there is an overall lower demand for commercial real estate, local brokers expect that sometime in the next 18 months, sale and lease transactions will pick up and lift the region out of its slump.

“We are coming into a period of time in the commercial real estate industry with the most uncertainty I have seen in my 13 year career,” says Alan Kleber, senior director with Cushman & Wakefield in Miami. “Taking into consideration weak tenant demand, additional inventory coming into the market, buildings purchased at unjustifiable pricing during the commercial liquidity boom, and debt coming to maturity creating additional stress for landlords, we are truly entering uncharted territory in 2009.”