U.S. Office Vacancy Rates top 2008 highs

Nationally, office vacancy rates have surpassed highs seen at the peak of the 2008 global financial crisis. Stress on US commercial property has only grown over the years as the COVID-19 shut down introduced more to working from home and hybrid schedules. Those who do still use office space have begun downsizing when it comes to renewing leases. Unoccupied commercial workspaces in America climbed to a record of 16.4% in the second quarter, according to a report from Colliers.

A combination of challenges has affected the commercial real estate market. High interest rates, hybrid work schedules, and credit squeezes. Net absorption rates have remained negative, resulting in vacancy rates and sublease space hitting new highs. Vacancy rates exceeded the prior record high of 16.3% last seen in 2008. Houston, Indianapolis, and Greater Los Angeles face the highest vacancy rates according to Colliers.

The Federal Reserve raised benchmark rates by over 500 basis points since 2022 to help with inflation, which is the highest increase the United States has seen since the 1980’s. Office property owners have previously been able to access low borrowing costs, and wit the surge in rates recently refinancing debts has become much more difficult. Some predict America’s biggest cities could be facing an economic doom loop. Hedge Fund founder Kyle Bass stresses that US banks face losing nearly $250 billion on their exposure to commercial properties.

This comes as the Mortgage Bankers Association (MBA) reports that commercial and multifamily real estate mortgage loan originations are down 53% in the second quarter compared to last year. This may change in coming quarters, but interest rates and other economic aspects of the economy will determine how much that trend changes.

MBA reported that various property types saw declines in dollar volume of loans. Healthcare saw a 74% yearly decline, retail and industrial both fell 55%, multifamily dropped 48%, and hotels slipped 32%. $1.5 trillion of commercial real estate debt is set to hit maturity and will need refinancing which could potentially bring a wave of distressed properties allowing prices of commercial real estate prices to plunge as much as 40% according to a Capital Economics estimate.

According to advisory firm Avison Young, Tampa’s office market experienced the lowest quarterly leasing volume in over a decade with 460,000 square feet leased. New office space is in demand, leading to an availability of 10.9 million square feet, which is a 1 million square feet decreased from the second quarter of 2022. Because leasing activity has been focused on new office spaces, availability is largely concentrated on older inventory.

Thank you for your interest. If you are in need of Appraisal & Valuation services in the West Central Florida Market, contact:

Mike Cliggitt, MAI, MRICS, CCIM

813.405.1705 | 863.661.1165 - Direct Lines

findvalue@cliggitt.com

Appraisal & Valuation Markets

Source: INSIDER | Avision Young

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Florida Approves Conservation Purchase of 340 Acres in Hernando County

By cliggittvaluation • June 10, 2025

In a surprising turn, Florida officials voted Tuesday to approve the purchase of 340 acres of forest land in Hernando County from Cabot Citrus, a luxury golf resort once at the center of a heated public lands controversy. This time, there’s no land swap involved—just a straightforward acquisition aimed at expanding conservation efforts near the Withlacoochee State Forest. The vote came from the Florida Cabinet, with Gov. Ron DeSantis, Attorney General James Uthmeier, and Agriculture Commissioner Wilton Simpson all in favor. If Cabot Citrus sounds familiar, it's because the resort drew fire last year after receiving initial approval to trade more than 300 acres of state-preserved forest for land it hoped to develop into more luxury golf amenities. The backlash was swift and widespread. After the Tampa Bay Times reported on the proposed trade, public outcry escalated, and Cabot quietly pulled the deal. Though DeSantis didn’t comment on the Cabot purchase specifically during Tuesday’s meeting, his office later celebrated the conservation deal in a press release, grouping it in with other land buys. Simpson, who previously supported the land swap proposal, offered a lengthy post-vote statement that subtly acknowledged the controversy and praised the new direction: “We paused, looked at alternatives, and ultimately arrived at a better path — one that serves the long-term interests of Florida and its people,” he said. He also commended Cabot for “shifting focus and prioritizing conservation,” calling the outcome a model for how land preservation decisions should unfold. Notably, just weeks ago, Gov. DeSantis was photographed golfing in a Cabot Citrus hat alongside Florida Fish and Wildlife chair Rodney Barreto, further fueling speculation about the resort’s influence. The land now on the table for acquisition sits directly southeast of Cabot’s current footprint—home to multiple golf courses and luxury cottages starting at $1.7 million. It borders the same area the company previously sought to acquire via land swap. The state still needs to appraise the land to determine its value. According to the Florida Department of Environmental Protection, the purchase price won’t exceed the appraised value. If the deal moves forward, the Florida Forest Service has agreed to manage the land and integrate it into the broader state forest system. While many conservationists welcomed the move, they also expressed caution. Eugene Kelly, president of the Florida Native Plant Society and a Hernando County resident, said the shift is promising but remains wary: “It would be great to see the land added to the state forest,” he said. “But I see all these mixed signals coming from the state.” Kelly has also called for full funding of the Florida Forever land acquisition program, urging lawmakers to allocate at least $100 million after earlier budget proposals offered none. After a string of recent land-use controversies—including efforts to develop state parks and transfer pristine conservation land to mysterious LLCs—this decision marks a rare about-face. Whether it signals a long-term commitment to conservation or a one-time course correction remains to be seen. Thank you for your interest. Have questions regarding the local market? Navigate the Real Estate Market with confidence, and contact us at Cliggitt Valuation for your appraisal, consulting, and valuation needs today. Mike Cliggitt, MAI, MRICS, CCIM 813.405.1705 | 863.661.1165 - Direct Lines findvalue@cliggitt.com Appraisal & Valuation Markets Questions about our blog? Contact our Director of Sales & Marketing, Sydney Avolt. Sydney Avolt 727.403.7418 - Direct Line sydney@cliggitt.com

St. Pete Beach Shuts Down Boutique Hotel Proposal

By cliggittvaluation • June 2, 2025

Plans for a 104-room boutique hotel on the east side of Gulf Boulevard were unanimously rejected by St. Pete Beach city commissioners during a May 13 meeting, effectively halting the proposed Windward Pass Resort. The decision denied the developers a conditional use permit, a hardship variance, and access to room credits from the city’s lodging pool. The project, which would have included six stories, waterfront boat access to McPherson Bayou, a three-story parking garage, two pools, a miniature golf course, bars on the ground and rooftop levels, a 12-slip dock, and more, was met with strong opposition. Developers sought 104 temporary lodging unit credits from the district’s 325-room allocation. However, with Hotel Zamora already approved for 64 units, only 261 credits remain for future projects—making this request a significant ask. City Planner Brandon Berry reminded attendees that unlike the western portion of Gulf Boulevard—where lodging is permitted by right—the Bayou Residential District does not allow temporary lodging as a matter of course. “This is not a lodging-permitted area,” he explained. The 2.67-acre site is one of the few remaining large, undeveloped waterfront parcels on the east side of Gulf Boulevard. Despite its size, project architect Jack Boziak argued that the site’s irregular shape—ranging from 293 feet wide on one end to just 125 feet on the other—left less than 40% of the land buildable after accounting for setbacks and drainage requirements. He called this a clear hardship. But commissioners weren’t convinced. Commissioner Betty Rzewnicki emphasized that the lot consists of four separate parcels and is located in a clearly residential area: “You’re trying to introduce a commercial resort into a residential neighborhood. That’s not a hardship—that’s a zoning mismatch.” Commissioner Joe Molholland echoed that sentiment, citing concerns about putting a large hotel with a rooftop bar in a low-density district. “This isn’t the western side of the beach where that kind of activity is expected,” he said. Commissioner Lisa Robinson also pointed to concerns about increased noise, traffic, and overall intensity: “A 104-unit condo hotel with multiple amenities is a lot for this area. The noise and density are already issues. Adding more would overwhelm the neighborhood.” Environmental concerns played a major role as well. Mayor Adrian Petrila specifically called out the potential damage to the shallow bayou and its manatee habitat: “This isn’t just a question of land use—there’s a real environmental impact to consider,” he said. “Even the so-called 'quiet pool' won’t be quiet in practice. I’ve been to enough resorts to know better.” In the end, the commission found that the proposal failed to adequately address community concerns or offer solutions to mitigate the negative impacts. Without clear benefits to the neighborhood and no meaningful compromises presented, all requests—including the rooftop bar and the 104-unit credit allocation—were firmly denied. Source: Tampa Bay Times Thank you for your interest. Have questions regarding the local market? Navigate the Real Estate Market with confidence, and contact us at Cliggitt Valuation for your appraisal, consulting, and valuation needs today. Mike Cliggitt, MAI, MRICS, CCIM 813.405.1705 | 863.661.1165 - Direct Lines findvalue@cliggitt.com Appraisal & Valuation Markets Questions about our blog? Contact our Director of Sales & Marketing, Sydney Avolt. Sydney Avolt 727.403.7418 - Direct Line sydney@cliggitt.com

Retrospective Appraisals for Commercial Properties in West Central Florida

May 20, 2025

In commercial real estate, understanding a property's value at a specific point in the past can be just as important as knowing what it’s worth today. Whether you’re dealing with an insurance claim after a storm, an estate settlement, or a legal dispute, retrospective appraisals can play a critical role—especially here in West Central Florida where market conditions shift rapidly and weather events are frequent. What Is a Retrospective Appraisal? A retrospective appraisal is exactly what it sounds like: an appraisal with an effective date in the past. It allows us to determine what a property was worth at a specific historical moment, based on the conditions and data available at that time. Unlike current or prospective appraisals, this type requires the appraiser to essentially “recreate” the market as it existed on that date—everything from sales comps to economic factors and the property’s condition. These types of reports are essential in several scenarios: Storm-related insurance claims : Establishing pre-loss value after hurricane damage Estate settlements : Determining fair market value as of the date of death Litigation support : Supporting disputes like business dissolutions or eminent domain Property tax appeals : Contesting over assessed values from prior years Financial reporting : Accurate historical valuations for audits or compliance Why They Matter in Florida Florida’s West Central region has seen rapid growth, market fluctuations, and its fair share of natural disasters. A solid retrospective valuation is often the foundation for a fair resolution—whether it's getting a tax adjustment or ensuring heirs aren’t hit with unnecessary capital gains. For example, Pinellas County encourages owners to seek certified appraisals to verify a property’s value before a storm—especially if they’re trying to comply with FEMA’s 50% Rule for rebuilding. Similarly, when a commercial property is inherited, a date-of-death appraisal ensures tax basis is properly adjusted for the new owner, which can have long-term financial benefits. Our Approach at Cliggitt Valuation At Cliggitt Valuation, retrospective appraisals are one of our specialties. We’ve completed these assignments for everything from small retail buildings to complex industrial facilities across Tampa, St. Pete, and Lakeland. Every report we prepare is: Detailed and data-driven , often requiring historical sales, old records, and archived financials Tailored to the local market , reflecting our deep knowledge of past market cycles in West Central Florida Credible and defensible , written with clarity and strong support so it holds up in court, with insurers, or in tax discussions Responsive and timely , because we know how important deadlines are in legal or estate matters We’ve helped clients with hurricane claims, tax disputes, estate transfers, and more. Each time, our goal is the same: to deliver a reliable and accurate value opinion that helps our clients move forward confidently. Final Thoughts Retrospective appraisals may look backward, but they’re one of the most forward-focused tools we have in real estate. When done right, they provide the foundation for sound decisions—financially, legally, and strategically. If you need a retrospective appraisal or just want to talk through a situation where one might apply, don’t hesitate to reach out. We’re here to help you look back, so you can move forward with clarity. Thank you for your interest. Have questions regarding the local market? Navigate the Real Estate Market with confidence, and contact us at Cliggitt Valuation for your appraisal, consulting, and valuation needs today. Mike Cliggitt, MAI, MRICS, CCIM 813.405.1705 | 863.661.1165 - Direct Lines findvalue@cliggitt.com Appraisal & Valuation Markets Questions about our blog? Contact our Director of Sales & Marketing, Sydney Avolt. Sydney Avolt 727.403.7418 - Direct Line sydney@cliggitt.com