Is Sarasota in a bubble (taxation, auction, outlet mall)

[MOforthewin]

Originally Posted by beach43ofus

If we could start converting failed vacant retail space into residential, we'd have more space for residences.

This could head off any potential residential real estate bubble by helping to generate more residential unit supply.

It would need to be re-zoned first, but the mindset has been that commercial-retail yields more profit, so they resist.

To squeeze max cash out of former commercial-retail, they have to build multi-story high-density...3 stories at the least.

The near vacant Westfield Mall in Palmer Ranch is great example of owners stuck in the past. To make matters worse, there's multiple owners.

They like the recurring lease revenue moreso than selling it, then having a taxable windfall profit.

Internet sales has killed brick 'n mortar retail, but stubborn old people, prevent the re-purposing of those retail relics.

Their inability to adapt, is contributing to residential unit shortages, & potential bubbles.

I have a retail business and finding something affordable is a bear if it's in a strip mall.

Everywhere I go I see TONS of retail spaces for lease all over. is it really cheaper for them to keep the rent high so they stay vacant so they can collect insurance and tax write offs?

That's one thing for sure is there is no lack of supply for retail spaces to rent unlike houses!

So you think it's a bad idea to open a brick and mortar retail shop? I remember you telling me that.

[beach43ofus]

Originally Posted by MOforthewin

I have a retail business and finding something affordable is a bear if it's in a strip mall.

Everywhere I go I see TONS of retail spaces for lease all over. is it really cheaper for them to keep the rent high so they stay vacant so they can collect insurance and tax write offs?

That's one thing for sure is there is no lack of supply for retail spaces to rent unlike houses!

So you think it's a bad idea to open a brick and mortar retail shop? I remember you telling me that.

Unless its medical marijuana, no retail brick 'n mortar.

[MOforthewin]

Originally Posted by beach43ofus

Unless its medical marijuana, no retail brick 'n mortar.

I saw another post you said about Amazon and you older folks like shopping in person. I own a cell phone accessories business at a fleamarket and my business has taken off this year but the downside it's only 3 days a week. If it were 5 days a week my profit (what I'd pay myself) would be close to 100k a year.



Customers tell me Amazon sends them the wrong cases sometimes. Like you order a iPhone 13 pro Max case but they send you a case that fits the iPhone 13 or 13 pro. Like I would never buy clothes or shoes online. buying shoes for me is tough and I must try them on due to my goofy feet.



Other problem is when I go into stores they're always out of stuff or poor selection. Even before Covid shortages looking for a product was a bear too because they carry minimal stock and then run out.



When I see new strip malls go up it seems the stores that do better are the large chain stores. Same with malls. Most of the stores in the mall are large chains.


Back in the 90s when you went to the mall a lot of the smaller shops would be locally owned small businesses. You hardly see any locally owned businesses in malls anymore.


Large retail chains can afford to have store fronts because they have a few that make a lot of money to cover the losses of the other stores. It's just to get their brand out there.


The market I sell it used to be one of the busiest markets in FL. Even back in the mid 2000s there was a waiting list for vendors. During season you couldn't even walk in there. MAny of the vendors were literally making what doctors make and only working 3 days a week. You'd see a lot of luxury cars too because there were making nearly 200k a year. When Amazon Prime came I hear is when the market tanked.


I know with my product all the old time vendors told me I'd be profiting probably 200k a year back then.


When I see malls located near a public university and an airport and they're struggling you know there is big problems with retail.


I thought at first with all the retired people moving to FL physical store fronts would survive a bit longer here but that isn't the case around here despite being mostly retired folks. But the more I thought about it these people ages 55 to 70 who are moving here and retired are older, BUT still used computers at their jobs and have knowledge with the internet and computers so they too mostly order online. You still have the older folks over age 70 who didn't use computers as much BUT they're dying out now and these new wave of retired people know how to use the internet.



So what's going to happen with this retail space? If even MORE become vacant is there going to be a bubble with that eventually?

[beach43ofus]

Office and retail space will be converted to other uses...like high-density mixed-use residential here in Florida, w/ some added greenspace mixed in.

Multi-story office buildings can be converted into condo's, & hotels.

I wish they'd start converting it now, rather than clearcutting land to build new residential like they're doing in Wellen Park, and massive areas East of I-75.

We have 2 nearly dead Major Malls in this forum area sitting on large plots of land, that look like crap. They are both 10 minutes from the beach, and are screaming to be converted into residential, which could avoid a bubble from forming.

Most of the retail property along 41 looks awful too. It's either vacant, or old, and in disrepair....total eyesore for this area.

We need more land close to our beaches for residential, & we have all this awful looking underutilized junk taking up valuable space because REIT's don't want to realize the losses.

I'd like to see gov't incentives provided to encourage transforming these eyesores into residential, anywhere West of I-75.

If we can make more land available for residential, it could head off a bubble, & it would look much more attractive than what we have now. Its past time for some re-purposing to begin.

[joshan]

Are they? or are they fleeing bad weather and high taxes? I am the latter.

[MOforthewin]

Originally Posted by beach43ofus

Office and retail space will be converted to other uses...like high-density mixed-use residential here in Florida, w/ some added greenspace mixed in.

Multi-story office buildings can be converted into condo's, & hotels.

I wish they'd start converting it now, rather than clearcutting land to build new residential like they're doing in Wellen Park, and massive areas East of I-75.

We have 2 nearly dead Major Malls in this forum area sitting on large plots of land, that look like crap. They are both 10 minutes from the beach, and are screaming to be converted into residential, which could avoid a bubble from forming.

Most of the retail property along 41 looks awful too. It's either vacant, or old, and in disrepair....total eyesore for this area.

We need more land close to our beaches for residential, & we have all this awful looking underutilized junk taking up valuable space because REIT's don't want to realize the losses.

I'd like to see gov't incentives provided to encourage transforming these eyesores into residential, anywhere West of I-75.

If we can make more land available for residential, it could head off a bubble, & it would look much more attractive than what we have now. Its past time for some re-purposing to begin.

You mentioned another bubble. Stocks took a big hit because of what's going on with Ukraine. If the price of oil goes through the roof and the market tanks how will that affect housing if people lose $$$ on their stocks? Smart people would pull some of their money out.


These overpriced houses I'm sure would take a hit if you're losing money in stocks and that costs you a couple hundred grand.


You mentioned the dead malls. I assume you're talking about South Sarasota and the one by Siesta Key? Further south the Edison Mall and Port Charlotte Mall are both on their last legs as well.


I Know the Sarasota case is because you now have the newer UTC and Palmetto too. It seems UTC when it opened took business away.


That's another problem. With online shopping there are too many malls now. Before Amazon and such you could have malls close together. Now with less shoppers all those malls are not needed hence why they're struggling. Sarasota has 4 malls like within 15 miles of each other when it just needs two.


I'm from St. Louis and the same problem. Was so many malls now they're closing or eating each other up.

[BP1968]

Originally Posted by MOforthewin

You mentioned another bubble. Stocks took a big hit because of what's going on with Ukraine. If the price of oil goes through the roof and the market tanks how will that affect housing if people lose $$$ on their stocks? Smart people would pull some of their money out.


These overpriced houses I'm sure would take a hit if you're losing money in stocks and that costs you a couple hundred grand.


You mentioned the dead malls. I assume you're talking about South Sarasota and the one by Siesta Key? Further south the Edison Mall and Port Charlotte Mall are both on their last legs as well.


I Know the Sarasota case is because you now have the newer UTC and Palmetto too. It seems UTC when it opened took business away.


That's another problem. With online shopping there are too many malls now. Before Amazon and such you could have malls close together. Now with less shoppers all those malls are not needed hence why they're struggling. Sarasota has 4 malls like within 15 miles of each other when it just needs two.


I'm from St. Louis and the same problem. Was so many malls now they're closing or eating each other up.

The old DeSoto Mall in Bradenton looks hideous and something needs to be done with that property/space.

[beach43ofus]

I guess we've concluded the real bubble isn't in residential property, but major retail mall commercial property

The owners of these delapidated malls just cannot let go of the past. Some are tied up in lawsuits, some are likely behind in property taxes so may have liens filed against them, & quagmires like that.

Eventually they'll become residential, to some extent. Its painful how long it takes though.

[joshan]

In the midwest they have modified outdoor malls to be half residential and half retail to try and create a mini housing district with shopping, restaurants and housing all within walking distance. Seems to be working out a bit better, these locations are doing much better than the stand alone malls.

[Trying941]

Originally Posted by beach43ofus

I guess we've concluded the real bubble isn't in residential property, but major retail mall commercial property

The owners of these delapidated malls just cannot let go of the past. Some are tied up in lawsuits, some are likely behind in property taxes so may have liens filed against them, & quagmires like that.

Eventually they'll become residential, to some extent. Its painful how long it takes though.

For reason not relevant, I am fairly familiar with commercial real estate and real estate development. As a general matter, commercial real estate investment is doing just fine. https://www.investopedia.com/top-reits-4582128. Some individual locations may be in trouble, and a few investors are in distress, but generally they are fine. Why? Investment is generally tax advantaged through Real Estate Investment Trusts that tend to be highly diversified by size of property and location - even when they concentrate in a particular vertical. Who is in trouble: a few verticals and locations that have lost or never had an anchor tenant where the properties are not part of a diversified portfolio.

Also, individual commercial real estate investors are usually high net worth individuals that have other assets and used the depreciation from the trusts as passive losses against other passive gains. They can withstand riding out any dips, even over several years, or taking the occasional loss where there is no exit. Over time, REIT gains have been consistent and even outperform other asset classes in recessions and inflationary periods. That has not changed. They are not concerned yet. Nationwide occupancy is still around 90% and foot traffic is now back to 85%.

There is no bubble in commercial real estate. To the extent you might argue there was one in some markets or verticals, the pandemic burst it already.