A conference focused on the commercial real estate market was recently held at FSU’s Turnbull Center and provided an interesting perspective on the dynamics of Tallahassee’s local economy.
The conference, attended by approximately 275 people, was sponsored by NAI TALCOR and facilitated by Ed Murray, President, Broker, and Director at NAI TALCOR.
North Monroe Corridor
One of the interesting discussions at the conference related to the commercial activity in the North Monroe corridor. Murray noted that just a few years ago the City of Tallahassee was considering a Community Re-development Agency (CRA) designation to boost development. The designation would have allowed tax breaks for developers. And even though the CRA idea never materialized, the area is now primed for growth.
Murray noted that The Centre of Tallahassee, which decided to mix retail space with government office space when the open mall concept did not go as planned, is slated to be home to approximately 1,700 state employees. Murray said this change will drive more retail to the area over next couple of years.
Also, just south of The Centre of Tallahassee, at North Monroe and Tharpe, the re-development of the Northwood Mall will provide more opportunities in the corridor for housing, retail and office space around the new City of Tallahassee police station.
Murray told the crowd that multi-family projects – not related to student housing – were running approximately $12.0 per square-foot. These means that an 800 square-foot apartment would cost about $800 a month. The vacancy rate for multi-family projects was, on average, approximately 9.2%.
In contrast, Murray said that the North American Properties project, adjacent to Cascades Park, will run $24.0 per square-foot or $1600 per month for a 800 square-foot apartment. Despite the premium, Murray said there was a market for the product.
On the student housing front, Murray noted that since 2012 there have been 12,479 new student apartments added while student enrollment in the surrounding higher educational institutions had declined by approximately 4,000. It would appear a day of reckoning my be ahead for those projects that are not located near the universities.