Everyone wants to see our local economy back on track. There’s some promising signs of recovery that didn’t exist during the Great Recession over a decade ago.
The stock market is up and down like a roller coaster the past eight months, but for the most part, it’s doing very well. The housing real estate market is booming in Florida right now. It’s the opposite of what most people expected when COVID-19 forced a shutdown of the economy. We’re hearing many stories of quick sales with multiple offers and some higher than list price. Great for the sellers, not so much for the buyers. We’re reading reports of people leaving cities to be safer from the virus, protests and restrictions for the suburbs. We’re also hearing reports of people moving to better locations now that they’re working from home.
Many are moving to Florida. Some for the fun and sunshine, others for the lower taxes. Maybe both. It looks like commercial real estate might be facing some additional issues thanks to the pandemic. It was already dealing with empty space before the pandemic due national retailers’ financial woes. They’re losing market share to Amazon and many other internet retailers. The lockdown and work from home push was a gift to the online retailers.
The professional office space market concerns me the most at this point. This looks like an issue that’s just getting started. Many companies have long term leases because they invest a lot of money when building out office spaces. Companies across the nation are probably looking at downsizing or closing offices. It may take a while for us to see the full impact of this change due to long term leases. Some businesses may be willing to pay early termination fees to get out of leases. Businesses that own their office could have a challenge with finding buyers. It may not be worth selling if there’s too much professional office space on the market.
Our communities do not have a significant quantity of commercial office space or corporate headquarters, so it’s unlikely we’ll see any major changes here in Southwest Florida. Much of our professional office space is medical and financial services. Cities will likely be the areas that are hardest hit.
In one of my columns back in August, I described the plan for the Florida Press Association to reduce it’s office space by 60% with so many work from home employees. Commercial real estate owners are going to struggle to keep their tenants and find new ones. I suggested looking at repurposing commercial space to fit other community needs like a shortage of affordable housing. That’s not as simple as it sounds. It would cost a fortune to repurpose an office building into apartments or condos. It’s probably not cost effective. Even if it was feasible, who is going to fund it? Professional office space in most cases, probably rents for a lot more than apartments.
It’s hard to predict what will happen to the commercial real estate market for offices and retail at this point.
The fallout of the pandemic has hit our local businesses hard. It looks like any business that was already struggling before COVID-19 is now gone. If you drive around our communities you will see businesses that were open before the pandemic hit, but sadly are no longer.
There will be more campaigns this year that will encourage us to shop local and support small businesses. The Daily Sun and Venice Gondolier are spending a lot of money on newsprint and ink to promote a shop local campaign. As we move into the holidays, I encourage everyone to safely patronize our local businesses. Look for those unique gifts in our malls, shopping centers and standalone shops. Enjoy a meal in our local restaurants while you shop local. Look for local professional services in our community to serve your needs.
I know it’s easier to just swipe open our phones and look for shopping deals or online services, but here’s a few points from our shop local campaign to consider. Our local businesses offer a personal touch that you cannot get anywhere else. Local businesses employ our family, friends and neighbors. Small businesses provide the vast majority of jobs in this country. Our local businesses are big supporters of the hundreds of non-profit organizations that serve our communities needs. Shopping local gives us more tax revenue for our local communities to build parks, schools, roads and needed infrastructure. Lastly, shopping locally is a form of entertainment. It’s an opportunity to go out with friends or family for the day and browse the many shops for those unique gifts.
Please support our local businesses and shop local all year round.