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Reasons for Optimism in Commercial Real Estate Market in Florida

The U.S. commercial real estate market is poised to end 2014 on an upbeat note. That’s the conclusion of a new report just released by the National Association of Realtors. The organization collects data from its members on commercial real estate transactions along with information on current economic challenges members face. The latest Commercial Real Estate Market Survey covers the third quarter of 2014 and points to several reasons for realtors to be optimistic. Among the findings include:

  • Sales of commercial properties rose by 7.4 percent from this time last year, a sign of accelerated investment activity, according to the association.
  • Sales prices also increased compared with the same period in 2013, with properties trading at average prices that were 4.8 percent higher.
  • Inventory shortages ranked number one on the list of challenges members face while concerns over local economies placed third.

South Florida Part of National Trend

The situation in South Florida appears to reflect the national trend. As the News-Press reported earlier this month, the region’s real estate market is seeing a “steady resurgence of the commercial sector, which fell hard about two years after the 2006 implosion of residential construction.”

The National Real Estate Investor went even further, declaring the Sunshine State’s commercial real estate market had “heated up to the point that foreign investors and lenders are chasing deals that extend beyond their comfort zones bringing the market to a crest.” According to the Investor, the competition in the Miami area has stiffened to the point that foreign investors are considering locations in Central Florida and Tampa Bay because Miami-area prices are now higher than they’re willing to pay.

Some Regions Still Struggling

Nationally, however, the picture is not all rosy. The survey by the National Association of Realtors also takes note of individual members’ comments, and they indicate there’s still some angst among commercial real estate professionals and considerable differences by region. One member reported the Houston commercial real estate market was “GREAT” – using all capital letters to reinforce the point. A Nashville realtor was also upbeat, saying the area is “very busy in all sectors.”

But another member characterized the market in suburban Chicago as “still struggling” with little chance of a rebound until 2016. And one described the climate in the Atlanta region outside the city proper as slow, “with the number one culprit being lack of permanent job creation and nervousness about (the) economy in general.”

Legal Expertise Critical

Given the volatility the market has seen in recent years, it’s important to hire an experienced real estate attorney to represent you when it’s time to sign a real estate contract to launch or expand your business. Commercial real estate transactions are notoriously complex, governed by various federal statutes, state statutes, and common laws that address a wide variety of legal issues when it comes to the acquisition, financing, management, construction, leasing, and selling of commercial property.

At the real estate Law Offices of Larry E. Bray in Lake Worth, Boca Raton and West Palm Beach, we’ll provide you with the legal counsel you need. Contact us today to schedule a consultation.

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