Although businesses such as Toys R Us and Sears are closing stores across the country, those in the area say the commercial real estate market in Southwest Florida is doing great, with developments such as University Village in Estero and Daniels Marketplace in Fort Myers clear signs that the economy is steady.
“Perhaps the real star of commercial real estate over the past few years has been the industrial market,” Dougall McCorkle, commercial associate for Premier Commercial Inc., said. “During the last recession, the industrial parks, which are largely populated by construction related companies, really suffered. Occupancy rates have since come roaring back and so have rental rates and valuations. Building values have doubled and in some cases tripled in value over that short period.”
According to the Bureau of Labor Statistics, financial activities are up by 6 percent, along with manufacturing, trade, transport and utilities.
“This year has actually been a really good year,” Enn Luthringer, a partner at CRE Consultants said. “Companies actually need more inventory to sell because industrial, retail and office industries are selling at record high numbers.”
Another sign of a thriving economy is the fluctuation of business models in local town centers and stores. With the wide reach that the internet has over most markets and rise of Amazon, businesses are forced to either accommodate for that fact, or continue with their original models and fight through it. Toys R Us was one such company that fell trying to hang on.
Shopping centers have begun to shift their business models to serve, rather than sell to customers. Bell Tower Shops in Fort Myers is one example, as businesses such as the newly-opened Society, a restaurant and bar, open up, trying to take advantage of an improved economy and more consumer disposable income.
“Retail centers now largely cater to restaurants and service related businesses, products and services and aren’t satisfied by the click of a button,” McCorkle said. “Fortunately, I think Naples’ retail is fairly buffered and most of the pure retail specialty malls are geared towards the recreational shopper rather than based on need.”
A recent study done by the Southwest Florida Economic Development Alliance estimates an increase of 30,000 in the Collier County population by 2025. An increase in population means an increase in spending amongst the citizens who live or vacation in Southwest Florida.
“We’re seeing all these storage companies coming down to build storage units for the people who vacation down here because our population is growing so fast,” Luthringer said.
Worries of a repeat of the 2007 market crash in Southwest Florida are rumors, analysts say. While foreclosure activity rose in the first quarter of 2018, that’s believed to be leftover fallout from the 2017 hurricane season, as rates of auctions and bank owned properties have been on the decline since March, and Collier’s foreclosure rate remains below both the state and national averages.
“The investment market for income properties is very tight right now, to the benefit of the seller. There is a very limited number of income properties for sale today and those that are have asking prices that aren’t for the bashful,” McCorkle said. “Prices have risen considerably over the past 4-5 years and buyers have started to dig in their heels as to prices. This will be even more pronounced as interest rates continue to edge up.”
Overall, the prevailing sentiment is one of positivity.
“The economy is generally positive,” Luthringer said. “We live in Southwest Florida because the weather is beautiful, and people want to vacation here which is good for the tourism industry which is better for the economy.”
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