Its not terribly surprising that the University of Florida’s assessment of the 4th Quarter 2010 real estate market is 
largely unchanged from the previous quarter. Market professionals continue to express concern about stagnant financial markets and rising unemployment in the state. Here is a summary of the Tampa Bay Area commercial markets:
- Cap rates increased over the past quarter across most property types, with the largest changes occurring in Warehouse (+0.31% change) and Office: Class A (+0.26% change). The largest negative changes occur in Condo Conversions (-6.30% change) and Free Standing Retail (-0.67% change).
- Cap rate outlooks indicate that rates are expected to be mixed across most property types in the next quarter. The strongest indication of a cap rate increase occurs in Office: Class A.
- Required yields for Tampa-St. Petersburg are higher, on average, than that of the state, 14.36% compared to 13.32% statewide.
- Required yields are highest for Condo Conversion at 20.7% and lowest for Free Standing Retail at 11.3%.
- Required yields increased across all but three property types last quarter. The largest shifts in required yields occurred in Condo Conversions (+1.61% change) and Office: Class B (+1.49% change).
- The investment outlook is mixed across property types, with the most positive outlook occurring in Warehouse and Distribution and Apartments.
- The outlook for Land Development appears to be neutral to negative for all land classifications.
- Future occupancy rates are expected to be mixed for a majority of property types.
- Rental rates are expected to increase slower than inflation across almost all property types over the next quarter.
