Downtown commercial brokers in Sarasota and Bradenton say prices haven’t been this low for more than a decade. “Values are nearly where they were a generation ago,” says broker Ian Black.
John Harshman of Harshman & Company Inc. references two downtown parcels currently for sale at prices per square foot that date back to the 1990s. The first, east of U.S. 301 between North East Avenue and Audubon Place, was listed at $20.46 per square foot and contains a two-story, 14-unit apartment building; the second, at 1750 Ringling, is vacant land listed at $28.51 per square foot. He points out he listed the former Southeast Bank building at Five Points at $31 per square foot 13 years ago.
Just take a look at these recent sales:
• Harshman sold a bank-owned, 31,000-square-foot property at the corner of Boulevard of the Arts and Cocoanut Avenue, where a portion of the failed Proscenium project was expected to go, for $670,000. The previous purchase price for the property was $6.7 million in 2007.
• Another bank-owned property at Central Avenue and Boulevard of the Arts sold for $300,000 in October 2010; the previous sale was for $1.25 million in 2005, says Harshman.
• Ian Black sold a property for $615,000 on Central Avenue in July 2010 that had previously been sold for $1.5 million in 2004 and for $522,000 in 1983.
• William Rex of Coldwell Banker Commercial NRT says a 1 ½-acre property at 322 N. Tamiami Trail sold for $1.9 million at the end of last year to an investor group. The parcels on this acreage, once part of real estate scammer Neil Husani’s portfolio, sold for $3,015,600 on Jan. 1, 2006, and again on Jan. 12, 2006, for $17 million, according to records.
• In downtown Bradenton, Ken Clanton of Wagner Realty says he’s experiencing shockingly low sale prices as well. “I just closed on 2.6 acres across from the new Manatee Players Theatre for $1.25 million”, he says. “The last sale was almost $3 million.”
So will businesses and developers start rushing downtown? Not yet.
Rex says downtown Sarasota has 18 to 22 months of inventory. “It probably needs to dwindle to a 10-month supply before we see improvement,” he says.
Clanton thinks it will be 2013 before downtown Bradenton’s commercial market improves. “All those balloon notes on commercial loans are coming due, and we have to wait until they move through,” he says. And banks have to be willing to loan. “They want 50 percent to 75 percent down for land financing, and that cuts out a lot of buyers,” Clanton says.
Buyers also want to make sure prices won’t go any lower, and Clanton thinks downtown Bradenton is only approaching the bottom.
The only real way to attract developers and businesses downtown is new jobs, brokers say. Until then, even dirt-cheap downtown commercial land won’t attract developers. “It’s a matter of letting the market work itself out,” Harshman says. “There’s still a lot of vacant land available.”