With vacancies creeping slightly higher, unemployment ticking up and the bottom dropped out of new construction, local unemployment rate is at a 15-year high. Commercial real estate is starting to see rents drop, and leasing for industrial and office space is becoming increasingly more competitive.

With commercial office space in Downtown Sarasota and Lakewood Ranch in double digit vacancies, now is an excellent time for large tenants and users to leverage the market conditions to their advantage. For mid to large sized companies, a 10-15% reduction in their budgeted rent costs could mean the difference between breaking even and being profitable.

For any questions on how a Tenant Representative can help you with your office or commercial space needs in Sarasota or Lakewood Ranch, contact me.

The following excerpt is from the Herald Tribune with more background on changes to the local employment engine.

The hardest-hit areas were the unincorporated parts of Sarasota and Manatee counties and the city of North Port.

That the local construction industry has fallen on tough times is hardly news, but the official July 1 figures released by property appraisers place precise numbers on the downturn.

For instance, new construction in North Port totaled $193 million last year, a 70 percent drop from the $655 million reported in 2006. New construction dropped 62 percent in the unincorporated parts of Sarasota County.

“Construction is a large part of our economy and that’s going to translate into lost jobs and, of course, lost revenues for governments and for businesses,” said Steve Queior, president of the Greater Sarasota Chamber of Commerce.

That cause-and-effect relationship between construction and jobs is seen in Labor Department figures for the area. In the Bradenton-Sarasota-Venice market, construction and mining have lost 8,100 jobs since hitting a peak of 30,300 in September 2006.

That sector has led the surge in unemployment, which hit 5.3 percent in April. The last time unemployment was higher was August 1993.

Sarasota County was particularly favored by dollars from the building boom, passing for the first time the $2 billion mark in new construction in 2005 and surpassing that with $2.3 billion in 2006.

But construction ground to a halt last year, dropping to $1 billion. The fallout was apparent in May 2007 when the county eliminated more than half the jobs in its building department, where applications for building permits are reviewed.

Sarasota County Property Appraiser Jim Todora said he did not think the county’s new construction would top even $1 billion last year. But several condominium projects that were nearly complete in 2006, but were not finished until 2007, pushed the figure higher than expected.

“A lot of this, remember, are carryovers from the prior year,” Todora said. “Sometimes there are properties that are 90 percent done but they don’t go on the roll for another year.”

For that reason, construction was actually up in the city of Sarasota and town of Longboat Key last year. It was down 42 percent, though, in Venice.

In Bradenton, construction was down by more than 50 percent. Charlotte County’s numbers were comparatively better, down 25 percent for the year.

Manatee County also barely clung to the $1 billion figure despite seeing new construction drop by 35 percent.

Based on the first half of this year, the numbers for 2008 will be a lot worse, said Dale Friedley, an analyst with the Manatee County Property Appraiser’s Office.

“My projection right now is we’ll be around $400 million,” Friedley said.

Local governments were already announcing layoffs and having a hard time making ends meet because of plummeting sales tax and impact fee collections. But when property appraisers released their June 1 estimates on what the real estate downturn had done to the local tax base, the news was generally worse than feared.

Charlotte County’s tax base was forecast to drop 22 percent as falling property values led to declining property assessments. Sarasota County’s forecast was a 17 percent drop and Manatee’s was 8 percent. In all, the property tax base for the three counties was supposed to be down $19 billion.

But for some local governments, Tuesday’s numbers held some rare good news. Todora’s June 1 estimate that Sarasota County’s tax base had shrunk 17 percent would have meant the county’s tax collections would be down $41 million next year.

The July 1 number, which is considered a final number and is used to set taxes, turned out to be down only 15.2 percent, which means county tax collections will be down $36 million.

In Manatee County, the new numbers translate into about $700,000 less of a budget hit than the county had expected.

Ed Hunzeker, Manatee’s county administrator, said the county should not add the extra money to its budget since more bad financial news is likely around the corner.

There are still tax appeals filed by local landowners that have not been settled. The county could lose those appeals and the taxes that go with them. Also, state revenue estimates continue “to forecast doom and gloom,” so state-revenue sharing funds are likely to drop, he said.