Economic Vitality Unplugged

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[Keith] Welcome to Economic Vitality Unplugged, the official podcast of the Tallahassee-Leon County Office of Economic

Vitality, where we dive deep into the people, the projects, and the partnerships that are shaping the future of

our community. I'm your host Keith Bowers, and today's episode is all about one of the most important and often

most visible indicators of our region's economic health—commercial real estate. We're going

to unpack what's happening across office, retail, and mixed-use development. And what it all means for

business expansion, job creation, and investment in our region. To help us do that, I'm

joined by someone who has been a cornerstone of this industry for decades. Ed Murray, Jr.,

president of NAI TALCOR. Ed is widely respected for his data driven perspective, his leadership

in the development community, and the role he and his team play in tracking and interpreting real estate trends across

the region. If you've attended the Greater Tallahassee Chamber of Commerce's annual Community Conference, you've likely

seen Ed on stage, presenting the state of our market. His insights are also shared in the spring,

during his team's community real estate update, which has become a trusted post-check on where we've

been and where we're going. Ed it's an absolute pleasure to have you on the podcast.

[Ed] Thank you. It's good to be here. I'm excited to be on this. [Keith] Well, great. We're excited to have you. So, Ed, let's

start with the big picture when we talk about the commercial real estate market in Tallahassee-Leon County, what are you seeing

and what's the current pulse in terms of momentum, investment, and activity in our community?

[Ed] I was just having this discussion. I'm on a regional bank board. So we were discussing the market this morning.

Temporarily, it's a little slow right now, a little jittery, because of just more national

and international forces that are going on. We hope and think this is a short-term event. Historically

though, Leon County has been a very stable market with the state governments, the universities, all of the

things that keep us stable. We don't spike way up, but we don't spike way down. And that's been consistent,

and we believe that will continue to be consistent. But we need to all focus on quality job growth, because that's what matters to me.

[Keith] What's so encouraging is the sense of stability and, slightly forward movement, even in the face of the broader

national uncertainties like interest rate, construction costs, our region seems to be holding

strong. What are some of the signs that give you confidence in the strength of our commercial real estate market?

[Ed] We're like most other communities certainly in Florida, but our community has not been building a lot of new buildings.

So what's been going on is we've been backfilling, renovating, backfilling and building existing product, which has caused

the rents to go up, but eventually it hits a tipping point and you'll start seeing things built. You're just

starting to see some industrial projects being built here in town. That's really the first sign. There's been no new office

build, or really, no retail build other than free-standing buildings in the last several years. So

it causes the market to be healthy. It's not a booming market right now, but it's certainly a healthy one.

[Keith] So if you don't mind, can we kind of backtrack just a little bit and talk to us about some of the developments that you are seeing.

You said there's not a lot of office and it sounds like some retrofitting might be occurring, or repurposing

of existing sites, can you speak about any of those? [Ed] Sure, if you've got well-located assets

and you take care of them, you're able to rent them in this market, whether it's an office, whether it's retail, or

whether it's industrial. We are starting to see some new industrial buildings built, not a full blown park,

but 50,000 footers, 30,000 footers, those type of things are starting to be built, which we have

not seen any new industrial product in the last many many years. There's also something going on in the surrounding counties.

I mean, I certainly view us as we're a regional hub, not just Leon County. I like to say is you can't tell

the difference where Fulton County, Dekalb County, Cobb County is in Atlanta. It's just "greater Atlanta," right?

[Keith] Right. [Ed] One day, it'd be nice to have "greater Tallahassee." You don't really know where the Gadsden County, Wakulla

Jefferson, even the Thomas county line is. We're just greater Tallahassee. That should be our goal for

all of us because that's how you really grow economically, we grow our base. [Keith] Well, that's a very good point.

And with the focus on regional economic development and the blurring of those delineated county

lines, we're starting to see that a lot in terms of workforce and the fact

that a lot of folks travel into Tallahassee to work, which means that they're investing in Tallahassee.

[Ed] That's what we want, right? [Keith] Right. Absolutely, exactly. [Ed] They're going to buy their cars here. They're going to shop here.

Their insurance agent is probably here. And you just go, you do the multiples of that. That's their medical. We're certainly

a large regional medical hub. And that's one of the areas that I think we're going to continue to grow in substantially.

Hopefully the FSU TMH partnership will continue to grow and the academic medical center will

begin to move forward. I'm the immediate past chair of TMH's board. And we all want that to

happen. We all see the benefits of it. It just has to be under the right conditions, but that can be a huge, absolutely

huge game changer for our community. [Keith] Yeah, that's very insightful. So, Ed, you've

become known for your annual presentations at the Chamber's Community Conference each August, as well as

your spring market updates. I mean, these highly visible data-rich moments help

the business community understand the trends behind the headlines. Can you talk about and give us some insight

as to how those presentations came to be and what you and your team try to convey through those?

[Ed] Years ago, I would do a small break out session at the Chamber on the Chamber's Saturday morning sessions.

You've been there for those too, Keith, you've done those actually. [Keith] Yes. [Ed] You know, smaller, the smaller rooms,

50 people would turn into 50 people, then 100 people, then 150 people. And then

one year we needed to double the room and open up the doors between the two. And Sue and actually

was when Jay Revell was at the Chamber. Sue and Jay and I met and said, "Okay, we either

need to make this on a bigger platform or not do this anymore", one or the other because it was affecting

the other sessions and that was not what we were trying to do. So, it was decided to move it to the Sunday session,

which is what we've been at. 10 years now, 10 or 12 years on Sunday. And it's really the only event or the main event

on Sunday. I was talking to a couple of my partners this morning, Slaton and John, and we were talking about

our business. People love to know what's going on. It's the cocktail party talk. You

and I are talking, Keith, and we're at some event and you're just curious, going, "What's being cleared on that lot?" and "What's

it going to be?" Everybody wants to know what's going on. So for us to really do our job as best as we can,

we need to know what the projects are. Whether we're involved in them or not, it helps. So we come back and we

discuss them. We try to stay fairly current on the projects that are going on in town. I know you guys track

them at OEV as well, but ours are more conversational, yours are probably deeper data-driven.

[Keith] Yeah, we track those major ongoing developments and the way we source our data is by permitting,

and the applications that are received and we kind of work in conjunction with growth management and the planning

department to figure out what's going on. And I view your presentations throughout the

year. They involve some pretty engaging storytelling as well and I've just been blown away

by the number of people that hang around because you're right. On Sunday everybody's really

looking forward to getting out of there and beating the rush hour for checkout at the hotel. But people

seem to stick around because they want to hear what's taking place and I just want to give you guys a shout

out. You do a great job of putting a fine tuned view on what's taking place, the graphics

and some of the stories behind those developments, I think is what gain traction and I think you're right.

It does provide some content for these conversations that everyone's having. So, hats off to you and your team for doing that.

[Ed] Yeah, I kind of view that, the Sunday session that the chamber, as- 'cause I've been going to the chamber conference

for as long as I can remember. I kind of view it as that's the last thing you're going to do you're going to sit in there. We

need to entertain you. You know, in some form or another. It doesn't need to be a deep data drive. It's not what they

want. I kind of picture 500 people eating their popcorn and drinking their coke and you know taking

something home with them that maybe they didn't have before. Some little piece of information versus, I have

an incredibly short attention span. So the last thing I want to see are graphs and charts. Just tell me

a story that I can take home with me. That's how we try to graph that and that's how we've started to try

to graph our- we didn't have five of our market trends we've got five of them now.

It started out. First one probably had 150 people, then 200, then 250. This

last one in March, we had 450 people registered and we think we had about 400

come to it and we got a survey and asked people if they liked the content, they liked the stories we try to give

them. You know if you own a building like this here's what you need to do to keep it as productive as it can be, here's what

things are doing and we try to move people in and out of the stage quickly and again everything points back to the

short attention span. Try to tell a bunch of stories and let people learn something and we learn something

every time we put this together we're learning something and the credit needs to go to Jessica in here and my staff

and everybody else, the team that builds this. I'm the one that stands up and talks but the rest of them

build the stories. [Keith] Yeah well again you guys do an outstanding job. Let's get into geography.

Everyone wants to know where are the hot spots right now? What parts of the county are drawing interest for office, retail,

or industrial development? [Ed] You're main two office markets are, the main office market

is downtown. That one has maintained really well. There's always going to be a segment of

people that want to be, have to be, need to be downtown and you take care to your properties.

We handle several of the downtown office buildings. So we're very familiar with rates and terms of leases and

who's moving in and moving out. So we try to stay on top of that, but it's certainly healthy.

Just again, take care of your assets is what you need to do. And then the Northeast has got a healthy office market

as well. And then there's certainly East, there's Summit East and other things like that. You've seen over the years you've

lost some office product through demolition and through things like that. Your Northwood went away. That's

going to be the new police station. Winewood may never be another office park again. It's very

difficult to lease third, fourth generation office space that was built in the 70s. It's really difficult.

So you see some product go away. The state's built some new buildings but overall our office market is healthy,

which is saying something considering most markets do not have a healthy office market. We've talked

about that in our presentations in the major markets. They're tearing big office buildings down, or trying

to repurpose them for residential. Nationwide, only about 10% of office buildings are structurally formatted where

they can be repurposed for residential. Most are not. So a lot of them are just going to be torn down. But our

market is relatively healthy, but we're also not anticipating any new office building of any structure,

of any size for the next many, many years. The only exception to that is going to be medical as we continue

to be a regional medical hub and as TMH's partnerships with FSU continue to grow, we think

that's when the buildings can be built. [Keith] That's interesting. And when you're talking about office,

what are you seeing now? Because there's been a big push for getting folks back in the office and away from

remote work. Are you starting to see those trends play out here in our community as well? [Ed] Yeah, but it has

prompted everyone to reassess how much space they really need, like our office. We're in an older

generation office building here in Midtown. And we easily grew and grew. If we

were to relocate, we would probably have 50 to 60% of the square footage we have now.

Because the format's totally different and that's what's happening all over the country. People are reassessing and saying, okay,

I don't need that 10,000 feet anymore. I can certainly get away with 5,000. I don't mind what I'm paying.

I'm not shopping my rate, but I'm shopping my size. And that's what we've seen happen since COVID.

And everybody's going to continue do that. [Keith] That's a great point. You mentioned development, and the hot area is

downtown and the northeast. Are there any developments or projects that have you

excited? [Ed] Yeah. One of them is, it was called the Heel, it's the GreenPointe project

out Mahan at the intersection where Amazon and Summit East and all that is. It's a 900-acre

project that's a mixed use project that a company called GreenPointe, that's a very successful development company

that does mixed use projects and many, many, many of them. They're now doing one in Tallahassee. It's going

to have retail. It's going to have some employment center space, which could be office, could be light industrial.

There's going to be, I think, 1,500 homes built when it's fully built out. They're going to be a couple of apartment communities,

shopping center, and several things over the next many years. That one's exciting to watch because some people

want to own a, they want to live in a new house. Some people live in an older house, but there's a certain segment of

the community that likes brand new, and that's what that's going to do. You can live there and you can move from one size house to

another size to another size. So keep your eye on that. Keep your eye on the project that's going

on up adjacent to Chiles on North Thomasville Road. That project, and you can see the clear of now.

That's going to be, approximately in two or three phases. Approximately 750 apartment

units. That's driven by being close to the schools, up in the Northeast, you're going to see some commercial up there.

There's also a project that the Ghazvini's are doing at Ox Bottom, Belvedere, and the realignment of that.

That's going to have some fresh retail built. Most of that, again, is going to be single-tenant buildings, but I believe they're

going to have one or two multi-tenant buildings there. So that's also in the process of growing. You can't come to

town without seeing all the new student communities that are being built right on the edge of campus.

[Keith] Yeah. [Ed] Because you can't come from the airport without seeing that, it's really just about no way to. So

that's a big section of our community that is continuing to grow with growth. [Keith] Those examples that you provided

are excellent examples because it shows that we're not just adding square footage, but we're creating more flexible, thoughtful,

and community-integrated spaces. So, I mean, I think the planning and the strategies in place

are really setting us up for future growth and development. [Ed] I agree. One thing that you alluded to,

we do need to have sites that are ready-set-go. Because if you think about it, you and I can literally

buy a car on our phone right now—right? [Keith] Right. [Ed] You can go in and you can submit everything and you can buy a

car on your phone! So, speed is, you know, one client of ours said "Speed is light". You've

got to be able to get to your objective quickly. And I do think that we don't have enough

sites that are ready-set-go. If we had a client that came to us that said, "We need a 100,000 square-

foot building. That's going to be a flex space building. We need to get it to capture what we

want to do. We need to have it sited, permitted, and built and completed within 9 to

12 months." That would be very, very difficult to do. Not impossible. You and I've

talked about this, or I've talked about this publicly, we need to have sites that are ready-set-go.

And that is critical. That needs to be a global point for us. [Keith] Yeah, I think you're right on point. OEV recently

has hired a consultant that has provided a strategic sites inventory where

we started with about 40 different sites that were suitable for commercial activation.

And through the filtering process, we basically narrowed it down to, right now, about 24 sites

that are rated 4 and above on a scale of 5. And we're starting to

invest in doing some due diligence on a few of those sites to get them a little bit closer to the

point where they're ready, but you're absolutely correct. I think when my team and I go to meet with

site selectors at various conferences and different events, that is one of the things that is most often

talked about, is the speed to market and the need for a certain level of due diligence and vetting

to take place ahead of time to get them closer to the finish line for these sites. I think you're right on point

with that. [Ed] Yeah, because we're losing opportunities to other markets. I'll guarantee you we are

and we need to have everything focused as we hopefully do the academic medical center. Hopefully

the MagLab continues to grow. All the other resources that FAM[U], and FSU, and whatever the new

term is for TCC [TSC]. Everything that that all has, we all have to be clicking it. We all have to be able

to work partnerships out and be able to come to the market quickly with the real estate that's needed and that's

not out there right now. [Keith] Let's pivot a little bit. You talked a bit about it a few minutes ago

and as my team and I go to more conferences that are focused on economic development and site selection,

We're seeing more conversations around adaptive reuse and repositioning underutilized commercial

properties into more dynamic or mixed-use environments. What's your take on the potential

for redevelopment here in Tallahassee? [Ed] There's certainly some redevelopment opportunities, but unfortunately

there's not as much there is another market's because a lot of the redevelopment's left for older warehouses,

right? They're in old warehouse districts. And since we're not an industrial market,

historically, we're not an industrial market. We're not a manufacturing market, historically. We have good manufacturers

here, but it's not like other markets where you just see millions and millions and millions of square feet.

Even in the Gaines Street area where there was some, quickly, the highest and best use group that older warehouses

were not what needed to stay and other things needed to be built. You know, Proof Brewery, did a wonderful

job with their building model reuse, and you've got some others that have done good work, They're just, unfortunately, they're

limited, their limited opportunity. [Keith] So, when you start talking about repurposing, do you have

a sense of the possibility of repurposing some property that if we see this continuing trend

in government shrinking, some of the state buildings that are currently being occupied by various departments with

the State of Florida. [Ed] Sure. There's that study going on now about what to do with

the buildings there on the, I guess, you would call it the southeast corner

of that 15–20 acres by the Capitol, of Monroe and the Parkway, where the Fish

building is. Fish and Game [Fish & Wildlife]. That's several buildings in there. That's

a large block. That's being analyzed now and the state is going to eventually get out of those buildings

that looks like they were built in the 50s and 60s and relocate down to the satellite office complex

and that's going to release over time. Several really good buildings now. Are they going

to be reused as they are? Are they going to be torn down and built for something else? But it's going to reposition

that entire quadrant there. At the Chamber Conference this year, Romney Louis, partner with Louis

& Whitlock, is going to be on stage with me on Sunday and he's been hired by the state to do the analysis

of those buildings. So if you guys are there, your crew is there, you're going to hear a somewhat of a

deep dive from Romney on what's going on with it's timing, what's it gonna look like for that quadrant. Because that's something

I think, most people don't know and it's something that most people are going to be interested in. [Keith] Yeah,

we'll definitely be tuning in for that, but yeah, that's exciting. That's prime real estate here, right downtown. Very exciting.

So, Ed, as we wrap up looking into the next three to five years, what trends do you see

on the horizon for commercial real estate in our region? [Ed] I mean, I think we get, we need to get sites ready-

set-go. I think we need our airport fully functioning. I know there's some work behind the scenes. I hope we make that happen.

I think we need to fully be open for business with our universities and our medical community.

Because those are areas that there's plenty of room for growth. I think we need to pursue the high-tech opportunities that

come out of FSU and FAM[U] and we'll figure out partnerships with those. And then the retail service

and office service can follow. Retail follows housing and the more quality job growth

that we can help and we can all pull growth in the same direction. That's when we start getting quality job growth.

[Keith] Excellent. Well, Ed, thank you so much for your time and insights today. Your work reflects what's happening in the market

and helps the rest of us really understand how to be thoughtful, strategic, and future-focused as our economy continues to

grow. To our listeners, if you'd like to take a deeper dive into commercial real estate trends that we've

discussed, check out NAI TALCOR's website or their links. I'm sure they've got a ton of information

available there. The URL for their website is www.NAITALCOR.com

and just stay tuned because Ed's unpacked a lot and I think

he just is scratching the surface. So for our listeners, if you want to learn more about Ed's work and access

the real estate information that he's presented today, please visit their website. And thank you for tuning

in to Economic Vitality Unplugged. Be sure to subscribe, share, and leave a review. We'll be back soon

with more conversations about the strategies and partnerships that are moving Tallahassee-Leon County forward.

Until next time, take care.

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