By: Charles Puccini
Commercial Asset Partners Realty
Three years ago, the trend in Southwest Pasco was for mature businesses that leased their space – to migrate from New Port Richey and Port Richey into the Trinity area. For Commercial Asset Partners Realty, this was our experience as well as our observation. The price delta was small enough – as in prices were low enough in Trinity, and could not get much lower on US 19, so the opportunity was there to make a move. The Governments hated this trend as this only fueled the taxable value downturn in the US 19 corridor even more. We were all waiting for the day of – The Return Wave.
As economies go, they do not perform the way you want them to. They perform as a response to market pressures. As of last year, the Trinity market approached “technically full”, as in all the desirable spaces were leased. The new emphases turned to developing land and new construction. Both of these features also react to the forces of the economy. We have all heard that “they aren’t making any more land”, so the pressures from supply and demand have taken hold and land owners are enjoying harvesting record prices. Along with the land, comes the costs of construction. Years back, Pasco County had a great supply of contractors and tradesmen. As an effect of the economic crash, and the advancement of cyber type careers, construction hires for tradesmen has lagged behind the demand. This pressure causes wages to increase for the individual construction worker – good for the worker. This also causes construction prices to rise and construction schedules to lengthen – bad for the developer and end user.
The Reverse Wave – these conditions are now making the existing properties along US 19 attractive for their shear existence. They are immediately available, and are eligible for updating and remodeling – both options that are cheaper than the new land and start from scratch approach at current escalating prices. We have participated in, and have witnessed many new transactions in the Return Wave. The work underway by the Governments to improve US 19 and the incentive packages that are being offered, are working. Buildings are changing owners. Investments are being made. As a result, values should continue to increase. This improves the tax base and generates more tax revenues for the Governments. The Governments can offer more and specifically targeted incentive packages, and sponsor improvement and repair projects of their own.
All of these improvements are compliments to an improving overall economy. The time that elapsed for the Wave to develop – and the Return Wave to gain economic momentum, has been years. This means that the “A” tenants are in the “A” spaces, “B” is in “B”, and so on. A long elapsed time for an economic trend, usually means a long time required to reach a bubble – something none of us want to see or talk about for a long time to come.