🔟 Flow of People

As I continue to address the “Counselors of Real Estate’s Top Ten issues affecting Real Estate for 2026”, I want to explore how migration and population shifts as well as pricing risk affect Commercial Real Estate in SRQ (Sarasota/ Manatee Counties).

Florida Is Still Growing — But the Pattern Is Changing

Florida continues to benefit from net in-migration, but the Counselors of Real Estate® caution that overall U.S. population growth is slowing. In markets like SRQ, growth is increasingly driven by retirees, remote workers, and wealth migration, rather than traditional corporate relocations.

SRQ’s office vacancy rate has remained relatively low (approximately 4.9% in early 2025, compared to much higher national averages), signaling solid local demand. However, this demand is tied closely to population dynamics and lifestyle-driven migration — not broad-based office expansion. As hybrid work reshapes where and how people work, demand has become more fragmented.

SRQ implications:

• Growth favors healthcare, professional services, wealth management, and boutique firms
• Demand is shifting toward smaller footprints and flexible layouts
• Class A, well-located, lifestyle-oriented offices outperform commodity space

Owner action steps:
✔ Analyze tenant demand by industry, not just by vacancy rates
✔ Track migration trends and remote workforce patterns locally
✔ Offer flexible lease structures aligned with hybrid work

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9️⃣ Pricing Risk

Strong Occupancy Can Mask Valuation Pressure

The CRE® identifies pricing risk as a national issue, but in Florida it is highly asset-specific. SRQ’s low vacancy rates can give the appearance of stability, even as higher interest rates and rising operating costs put pressure on valuations.

Assets purchased or refinanced between 2019 and 2022 are especially exposed as underwriting assumptions reset. The key issue is not demand alone, but whether income and valuation expectations remain realistic in today’s capital markets.

SRQ implications:

• Appraisal volatility is common
• Debt service coverage ratios are under pressure
• Owners must distinguish between cyclical market risk and true asset obsolescence

Owner action steps:
✔ Commission updated valuations proactively
✔ Stress-test refinancing scenarios under conservative assumptions
✔ Diversify tenant mix to reduce concentration risk

Source: Counselors of Real Estate®