Margaret-Sheehan Jones, the commercial Realtor, could hardly contain herself. “I’ve waited so many years to say this—it’s an improving market in the world of commercial real estate. Halleluiah Jesus.”
Sheehan-Jones this morning was giving Flagler County’s Economic Opportunity Council her periodic update on the local real estate landscape. She was followed by an almost equally enthusiastic Helga van Eckert, the county’s economic development director, who spoke of prospective sausage makers and helicopter manufacturers looking at locating in Flagler, and of Sea Ray Boats’s expansions.
The two reports added up to one of the more buoyant summary of commercial economic activity the council has heard since its inception three years ago, echoing broader trends: 2014 proved to be the best job-creation year since 1999 nationally, while in Flagler, the unemployment rate has fallen steadily into the 7 percent range, less than half its Great Recession peak.
Sheehan-Jones pointed to three factors improving the commercial real estate landscape. “We’re seeing foreign investors in little Flagler County,” she said. “I’m working right now with a group of Chinese people who typically go for income-generating assets, triple-net lease types of transactions, and as you know we don’t have a lot of those transactions but we have a few and we are attracting interest from outside of this country, which is incredible and so needed, because of course it helps overall growth.”
Second, local businesses are growing out of their spaces—on Hargrove Grade, for example (Sheehan-Jones did not name names). They’re looking to either build new facilities or find existing, larger spaces to move into.
Third, “we are actually seeing some spaces that have been vacant for many years now attract tenants,” she said. The three-story building adjacent to Town Center’s Central Park, which houses the Chiumento Selis Dwyer law firm, is getting new tenants. The first floor was always reserved for retail. But it remained vacant for several years. Two tenants (under one owner) will be moving into 40 percent of the first floor soon. (While the details aren’t known, a dentist’s offices are reportedly moving in, though Dominic’s Restaurant, which depends on city staff traffic at its City Marketplace location, has also been reported to be considering a move there.)
Palm Coast’s construction of City Hall nearby—the building’s walls are now rising, and the structure will be completed by fall—“did play a part,” Sheehan-Jones said, but not the only part: the county’s crossing the 100,000-population threshold also did, as did the county’s improving income demographics. Those demographics took a hit during the recession, with the child poverty rate alone increasing from 11 percent before the recession to 14 percent in 2014, according to the Census Bureau. But some income categories are again on the upswing, Sheehan-Jones said.
“Those three trends alone are worth the price of admission here,” she said, before providing yet another encouraging summary: the improving asking and selling prices for real estate.
The asking price for retail property went from $145 a square foot in January 2014 to $150 a square foot 12 months later, a 2.7 percent increase. Multi-family property sales’ asking price increased 12.3 percent, office property increased 4.5 percent, and industrial space 9.5 percent.
“While those are important, as all of you know what really matters are sales prices, and for those same four categories we also see good increases, year-over-year,” Sheehan-Jones said: retail space sold at prices 5.2 percent better than a year before, multi-family space sold at 9 percent higher prices, office properties saw a 5.4 percent increase and industrial space saw a 10.2 percent increase.
Last week, GoToby.com reported that Palm Coast developer Jim Cullis, the man behind Grand Haven, signed a purchase contract for the property occupied by the former Lehigh Cement plant on Colbert Lane, another example of movement on the commercial real estate landscape. “I don’t expect any speed bumps. Cullis knows the property well,” Toby Tobin, the publisher of GoToby, wrote, noting: “Cullis’s willingness to develop a residential project bordering the Sea Ray plant is a contradiction to claims by nearby Lambert Ave residents who are fighting a Sea Ray proposal to expand its employee parking lot. They claim that Sea Ray’s presence diminishes the value of their property. Obviously, Cullis does not agree.”
Eckert and the council focused on that Sea Ray expansion in a long discussion this morning, with van Eckert outlining her department’s efforts in support of Sea Ray—and on Sea Ray’s robust economic activity and employment numbers: it is the third or fourth largest private employer in the county—and winning a supportive motion for the controversial expansion from the council. The county’s planning board rejected the application for Sea Ray’s parking lot expansion. The matter now heads to the Flagler County Commission.
Van Eckert also shed a bit more light on the always-enigmatic business prospects hovering in the area. State law allows government-run economic development agencies to shield those prospects from the state’s open-record law for a period, giving them a chance to explore their options. But van Eckert provided some nibbles ahead, such as “Project Hot Dog,” a Ukrainian sausage manufacturer.
“They are really very interested in coming in,” van Eckert said. “Ukraine is actually one of the communities that we’re seeing more and more interest in Flagler County, so I’m curious to know if we actually have a bigger Ukrainian population coming in or if it’s just happenstance that we’ve been meeting so many Ukrainians.” The answers are not forthcoming. “Why specifically Flagler County? None of them have said they have family here or anything like that. But we’re fortunate that they have found us.”
The county is also speaking to a company looking to build helicopters. “We’re calling that Project Igor, so we’ll see where that one goes.” Given van Eckert’s penchant for including clues in her project names –for months, she referred to the Sea Ray project as Project Wall, because Sea Ray’s manager is Craig Wall, and as van Eckert explained, “hence Pink Floyd, the Wall, for those of you who are old enough to know that”—any reference to helicopters that includes the name “Igor” would have to have something to do with Sikorski, the helicopter manufacturer, whose founder was Igor Sikorsky. Another Ukrainian, incidentally.
In late January, Aerosync Support Inc., a new helicopter manufacturing company that provides labor and technical support to Sikorsky helicopters, among others, announced that it would be locating a plant in Santa Rosa. The company qualified for state tax refunds under the state’s job-incentives program, which Flagler participates in.