As 2024 came to a close and we peered into 2025, our group of real estate experts offered cautious responses with a hint of optimism. Thirty percent continued to view the commercial market as “weak” and 50% declared it “stable.” The remaining 20% were more optimistic as we entered the new year. Seven percentage points moved up from the “weak” response and the number reporting “strong” doubled over the previous quarter. This is little change in overall market outlook from the midyear results but some of the detailed responses raise hope for coming improvement.

The results are based on a regular quarterly survey of UF Bergstrom Real Estate Center advisory board members. We initiated the latest survey shortly after the Nov. 5 general election. Given the focus on the economy and the widely divergent presidential platforms, you might anticipate that the results would heavily influence responses. This makes the response consistency all the more remarkable. Perhaps individuals changed their expectations after the election, but the cumulative overall outlook showed amazingly little change.

One of the detailed characteristics that showed significant change over the past quarter was capital availability. To differing degrees both equity and debt availability improved, revealing a continuation of the pattern established earlier in the year. Referring to Figure 1A, the percentage of respondents describing equity as “limited” or “tight” declined materially, emphasizing the general direction of “less negative” running over the entire year. Conversely, respondents reporting “stable” or “growing” increased during the quarter, extending the gradual increase in the equity availability pattern for the year.

 

More dramatic than the equity picture is the change in debt availability presented in Figure 1B. No one has described debt as “very tight” over the past year and the number of people viewing it as “limited” has dropped off dramatically. As of fourth quarter, almost 70% of respondents label debt availability as “stable” or “growing.” Since midyear, the debt picture switched from predominantly unavailable to available and growing. This result is more impactful on market direction than the change in equity availability.

 

It seems respondents’ view of tenant demand oscillated over the past year. The center columns in Figure 2 show that many respondents, just under 50%, believe that demand has remained “stable.” Those reporting “increasing” demand fell from 39% during 2Q to 32% in 3Q and those reporting “declining” demand rose from 14% during 2Q to 18% in 3Q. These steps reversed back to the previous positions during 4Q with “increasing” rising to 38% and “declining” returning to 14%.

Notwithstanding the momentary weakening of demand during 3Q, the demand pattern presented in Figure 2 over the entire year was relatively stable. We can roughly suggest that half of our experts described stable demand with two-thirds of the other half believing that it was improving. This may not be as exciting as rapid demand growth, but it is a solid demand picture for the state.

 

Metropolitan area growth ratings held mostly constant. The columns in Figure 3 show the most recent four quarters for major Florida metros on a scale of 1 to 10. Notice that the quarterly scores show little variation for each market. For instance, the Sarasota-Bradenton area ranged between 6.0 and 6.6 and Orlando was even tighter ranging between 6.3 and 6.5. Thus, our contributors’ views did not change as time passed over the year. There was some difference in outlook between markets as Fort Myers and Jacksonville both ranged between 5.0 and 6.0 but Miami scored above 7.0 in each quarter. As the outlook stayed conservative and capital availability improved, the expectations for market growth remained stable.

 

Another detailed characteristic that shifted over the recent past, including 4Q, is the expectation for hiring new real estate professionals. As seen in Figure 4, the majority of respondents estimated that their firms will hire the same number of employees this year as last. This percentage shifted upward over the past two years by capturing a number of firms moving from hiring “fewer” to “same.” The striking evolution over the past two years reflects the reduction of firms hiring “fewer” and the climbing percentage of firms planning to hire “more” employees in the coming year. This expectation seems to follow the capital availability trend more than the overall outlook.

 

Supporting the improved outlook for hiring is an expectation for increasing business activity in the coming year. The chart in Figure 5 shows a building confidence in business growth. From a low point in mid-2023, when no one expected to do “much more” business and 60% of the group expected to do “less” business, this particular outlook reversed. During the in fourth quarter, just 5% of respondents expected to do “less” business and 70% expected to do “more.” This improvement pattern started about a year ago, but the most dramatic increase came in the latest quarter when those expecting more business jumped from 45% to 70%.

 

When asked the headline question about general commercial real estate outlook, respondents’ expectations shifted slightly to “improve.” The majority viewed the market as “stable.” Responses to more specific questions about business expectations, hiring expectations, and capital availability reveal a significantly brighter picture than the collective view.