BREVARD COUNTY MARKET OVERVIEW

 

This Market Pricing Survey was gathered from information provided by LoopNet Services; EDC of Central Florida; Tuttle-Armfield-Wagner Appraisers; The Staubach Company and Pruitt Commercial Group.

 

Office Space

Kennedy Space Center has over 1.5 million sq. ft. of office space. The majority of office space is located in the Headquarters Building, Operations & Checkout Building, Space Station Processing Facility, Operations Support Building (OSB) I & II, and the Central Instrumentation Facility. There is also additional office space in the Space Life Sciences Lab (SLSL) and Payload Processing facilities.

 

Warehouse Space

Kennedy Space Center has over 1 million sq. ft. of storage/warehouse space. The majority of the storage/warehouse space is climate controlled. The (2) largest facilities are the LC-39 Logistics Facility with 300,000 sq. ft. and the KSC Central Supply with 130,000 sq. ft.

 

It appears the Brevard County market has stabilized in regard to occupancy and within some property classifications we are seeing an upward trend in occupancy. The stabilization trend and increase in some property classifications is a positive sign. However, in most property classifications, vacancy remains high.

 

On the other hand, we are still seeing rents in a declining trend. Much of this is a result of the renegotiation of leases and landlords cutting deals in an effort to attract and maintain tenants. We believe this trend will continue until occupancy levels strengthen. In order for this to occur we believe we will need a strengthening in the national economy.

 

There are signs that overall economy is strengthening; however, the country is still fighting a high unemployment situation. The shifting from complete Democrat control at the federal level during the 4^th Quarter may also have a positive effect. No matter what your politics are, it appears we operate better with a balance of power.

 

The cancellation of the Shuttle and Constellation programs will directly affect the Kennedy Space Center’s facilities and employees, as well as most of Brevard County; however, not all employment news is negative.

 

Melbourne International Airport has been attracting major companies from the aviation industry. Embraer’s first phase of construction is nearing completion and AAR and Midair USA announced they are locating U.S. aircraft maintenance operations at Melbourne International Airport. Total capital investment for the three projects is estimated at $85 million. Employment from these three companies will be in the range of 950 direct jobs. The airport authority reports there is strong interest from other companies.

 

We believe the near term outlook for the Brevard County commercial real estate market is not positive. An overall weak economy and the looming job losses from the Space Center will make any recovery difficult in the near term. The outlook for strengthening will be dependent on the recovery of the economy, which by all accounts will be a slow process.