2020 Q2 Commercial Real Estate Sales Trends for Hillsborough County
July 27, 2020
The second quarter of 2020 was the first full quarter when the Coronavirus took complete control over nearly every aspect of life, including the commercial real estate market in Hillsborough County. While the first quarter of this year finished with the highest sales volume of any quarter in the last dozen years, sales figures for the second quarter put estimates back at 2011 levels. Sales volume from Q1 to Q2 dropped 70.8%, which equates to a difference of over half a billion dollars in sales volume.
From large to small and from service-based to retail trade, companies and industries of all varieties have had to make changes to deal with the pandemic. Some industries - especially the retail and hospitality - were negatively impacted and continue to deal with the severe consequences of this outbreak. Other sectors of the commercial real estate market, especially multifamily and industrial, have managed to maintain a consistent flow of sales and leasing activity throughout the last few months. In the second quarter of 2020, these two industries accounted for 61% of all commercial real estate sales volume in Hillsborough County.
Activity within the different submarkets of the Tampa Bay area remained relatively stagnant, with the exception of the West Tampa and East Tampa markets. Both of these submarkets are home to several multifamily and industrial properties, respectively. So it's no surprise to see these markets remain strong despite declining economic conditions.
Looking ahead to the next few quarters, we will be most concerned about the liquidity of local businesses. As long as these small businesses continue to pay their rents, commercial landlords will continue to pay their mortgages. But, if fewer and fewer businesses make it through this pandemic, we will see a rise in the number of distressed real estate assets on the market come wintertime as banks will be forced to foreclose on these commercial landlords. That's bad news for current business owners, but delightful news for future investors.
For more information on the 2020 Q2 commercial real estate sales trends throughout the greater Tampa Bay area, visit our interactive charts and graphs on Tableau.