Why should we care about the indicators of a recession?
It seems there’s still gas in the engine for growth, and Nationally the Leading Economic Index rose again for the first time in 5 months, which indicates improved financial conditions and a rebound in stocks that offset any labor market issues that might have been as a result of the government shutdown. The economy is still healthy with unemployment near a 50 year low and there are still very few major reasons to worry about the fundamentals.
There are spots to watch such as the treasury yields in financial markets and rising construction costs in real estate markets, but with the Fed indicating how they’ll slowly approach rate increases this year it continues to breathe life into the economy. Add to that fact that recessions usually appear close to 2 years after yield curve inversions and you get more confidence that time is on our side for 2019. Yes, slowdowns could occur in the areas of lower yields for investors and more disciplined lending by bankers, which slow down investment returns, but the amount of capital and liquidity in our system is more than eager to test those theories.
Florida outpaced the country’s average in 2018 for job growth, and local sentiment is that Tampa Bay’s economy and growth have plenty of runway to go, and good tailwinds behind us, with some experts thinking that we’re just catching up to where other metro areas are in their stage in the economic cycle. Population growth is the 2nd highest in the country and that popularity is bolstering investment decisions locally.
With the trajectory of Tampa’s direction, the notion that time flies by quickly, and the fact that we have a NFL Super Bowl here in 2021, it points to a busy 2019 and 2020... So, there’s no real detrimental slowdown in sight…Right? We’ll see, but either way if you network around town and meet the business leaders that are helping shape our growth you will notice that there is a lot of excitement and positivity around our future here. If you haven't seen the reasons to move to Tampa yet, please click here to read this article.
From a commercial real estate perspective, a Call to Action that I see is that we need more real and available supply before major companies will move and relocate to Tampa Bay. The timeframes those companies consider when relocating require more immediate supply to allow them to make the right decision based on their demand. If the I-4 Corridor was a state it would have the 4th largest population growth in the country, and with that growth you can believe major corporations are considering our area, asking questions about what’s available, and deciding if their business plans meet the timing of new development or if they should wait until more office or warehouse product is available to move in to.
From a seaport perspective, the industrial projects in this area are not limited to just the new warehouses being built along the I-4 Corridor, but also on the Port of Tampa near downtown. The Port has millions of dollars of development being planned, both in cross docking and in a new steel mill on port property, as well as land at the edge of downtown Tampa’s central business district that could be a mixed use development in the coming decades. Our Port’s revenues break records every year and it’s not just from the cruise business. Get to know your local Port...there’s a lot more going on there than you think!
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Each sector is moving at its own pattern. Multi family is now potentially decreasing in rents, retail is still growing and breaking the idea that ecommerce won, coworking and office space dynamics are yet again changing again with the shift in how people go paperless and park extra employees, and industrial is now the darling of CRE.