What with prices of some retail and office space doubling in the past year, it might be tempting to think so. And some evidence is there. We're obviously in a white-hot real estate market where buyers-many of them foreigners who are taking advantage of the weak dollar-are plentiful, commercial inventory is low and prices continue to shoot up. "I sold an 18-unit apartment building for $875,000 and the client said he'd sell it for $2 million the next year," says realtor Jag Grewal of Coldwell Banker. "I said, 'no way.' Then we sold it for $2.5 million."

The region's top commercial realtors say it's definitely a seller's market. At a summer meeting of the Sarasota Association of Realtors' Commercial Investment Division, there were only two commercial properties on the table for sale, says Chuck Palmieri of Prudential Palms Realty. Not so long ago, commercial realtors would have 10 to 20 properties to show to potential buyers.

This lack of inventory is combined with a large number of buyers who are looking to park their money some place outside the stock market. And since Sarasota hit the radar screen as one of the most desirable places to live and work, it's been a feeding frenzy. Commercial realtor John Harshman says some downtown properties are selling for $300 a square foot while the rents they receive are at $15 a foot, much lower than the $25 to $30 that would provide a profit. "Rates of return are falling, but that still isn't deterring people," says Grewal who is working with a group of Irish investors (not Patrick Kelly and his group) right now.

But despite the spike in purchase prices and what appears to be unrealistically low rents (at least downtown-they're a bargain compared to the $55-a-foot average St. Armands tenants pay or the $40 to $50 a foot Westfield Shoppingtown Southgate tenants are charged), commercial realtors are still bullish. Inflation and interest rates are still low and many buyers are paying cash so they don't have mortgages to worry about. "For a longtime player, this market is difficult to fathom," says Harshman, "but demand continues. Rental rates just haven't caught up yet." Harshman points to the $30 a foot that tenants of Five Points Plaza and the Whole Foods project are paying as evidence.

Lakewood Ranch commercial realtor John Swart, who is chair of the Sarasota Chamber's office space committee, agrees completely. "I'll make a promise. Rents will go up. There's no vacancy." Office vacancy rates in the county stood at 8.78 percent last July (7.76 percent downtown)-"and anything below 10 percent vacancy is excellent," Swart adds. Brian Kennelly of Osprey Management Company and chair of the Sarasota Association of Realtors' commercial division, says Sarasota's vacancy rates are lower than in comparable markets around the country: "As long as the lease market is strong, it justifies the increased purchase price of the buildings."

Then there's the influx of new residents, who continue to pour in. And where there's population growth, there's business growth, which means demand for new commercial properties to house them.

So is there a bubble? "There's only one way to know for certain," says Sarasota tax advisor Ken Honick. "When it bursts."

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