Q1 Office Segment Sarasota and Manatee Markets

In the first quarter of 2024, the Sarasota and Manatee office markets demonstrated resilience amid evolving economic conditions. Sarasota maintained a low vacancy rate of 4.5%, despite experiencing four consecutive quarters of negative absorption totaling -130,000 square feet over the past year. This stability is attributed to minimal new office construction, with only 120,000 square feet delivered during the same period .

Average asking rents in Sarasota hovered around $29.00 per square foot, reflecting a deceleration in rent growth to 4.0% as of Q2 2024. The average sale price for office properties stood at approximately $184 per square foot, indicating steady investor interest . Capitalization rates in the region were estimated at 9.3%, slightly higher than the three-year average of 8.8%, suggesting a cautious yet optimistic investment climate.

Notable transactions in the area included the sale of a 28,000-square-foot medical office building in Sarasota for $5.6 million, a 35,000-square-foot Class B office property in Bradenton for $6.3 million, and a 22,000-square-foot professional office center in Lakewood Ranch for $4.4 million. These sales underscore the continued demand for well-located office assets in the region.

Overall, the Sarasota and Manatee office markets in Q1 2024 exhibited strong fundamentals, characterized by low vacancy rates, stable rental growth, and active investment activity, positioning the region favorably for sustained growth in the commercial real estate sector.