Hundreds of Tallahassee's commercial real estate movers and shakers gathered at The Moon on March 30th. The event was the 6th Annual Commercial Real Estate Market Update, hosted by NAI Talcor. That firm, which now handles all kinds of commercial property transactions in the Florida Panhandle, South Georgia and Southeast Alabama, was founded in 1990 by Ed Murray. Although he's hesitant to call the Tallahassee market "stagnant," he says it's so stable he went back to some visuals he prepared for a market update several years ago.
"That showed about $3.3 billion of private sector construction. It started a couple of years ago and we're right in the middle of that and thank goodness we are. Because in our opinion, if you pulled that activity out and you pulled out the activity that is going on around FSU's campus - those midrise student housing developments - which are wonderful; they're providing a need for FSU and FAMU students. You pull those two sectors out and it's pretty dang slow. Pretty dang slow."
And what about all those student housing projects? Is the Tallahassee market facing saturation and overbuild? Murray thinks that situation will ultimately self-correct.
"It's supply and demand as well. So in '26 and '27 there are going to be more new construction beds available than there have ever been. But that will be absorbed in the next couple of years."
But the local market is changing. Murray cites a potent example.
"To our knowledge, there was not one office building permitted, started, finished, any activity in the last 12 months. Not an owner-occupant, nothing! I don't ever remember that stat in my 40+ years."
There's also the seismic shift in retail from in-store to on-line. Murray says that's changing the tenant mix in shopping centers of all sizes.
"The quote I use all the time is, we're having to fill these retail centers up with things that you can't buy on Amazon. Now what is that? That's restaurants, that's fitness, that's the service industry, it's medical, it's things like that. That's the thing that's going into these shopping centers."
Looking ahead, NAI Talcor's Ed Murray thinks Tallahassee can see a bit more commercial real estate activity. Especially as the region sits on the cusp of Tallahassee Memorial's coming under the Florida State University umbrella.
"This will secure a bigger, better partnership. I think we need to get the tech transfer. Continuing to work on that, which I know there's hope for that. We need site readiness so that when we do land some out-of-town businesses or we need expansions that we actually have sites that can be permitted quickly to be able to move into. There are a lot of things that need to be done."
In the meantime, the Capital City's commercial development will remain, to use a polite term, "restrained."
