By Gary Tasman
“Sustainability” has become one of the most common buzzwords in the business world, thanks to an evolving movement focusing on the triple bottom line: Profit, people, and planet. While the environmental impact of the way we conduct business shouldn’t be downplayed, the last year forced many businesses to double down on the first two “Ps” of sustainability: Profit and people.
Social distancing and other precautions during the early months of the pandemic certainly created concerns about the long-term profitability of our local businesses, especially those in the hospitality industry. At the same time, the pandemic placed great strain on our people, who had to learn to work in new ways—or had to find ways to live without working—until restrictions were lifted.
Despite the challenges, Southwest Florida has thrived. Our businesses—and by extension, our commercial property market—have sustained through the pandemic. I like to call this trend “Business Durability,” and Southwest Florida has it in spades. In May 2021, the U.S. Bureau of Labor Statistics reported that the unemployment rate in our region was as low as 3.7% in the Naples metro area with Punta Gorda and Fort Myers-Cape Coral slightly higher at 4.6% and 4.7% respectively. All three were stronger than the state average of 4.9%, and a full base point better than the national unemployment level of 5.9%.
How do these numbers translate to commercial property? Consider this: In the first quarter of 2021, 16.4% of commercial offices across the country sat vacant. Here in Southwest Florida, our collective business durability resulted in an office vacancy rate of just 5.9%.
What made Southwest Florida’s businesses so durable in comparison to companies in other regions? There are a variety of factors, but I’d like to focus on one that I think is often overlooked: Our favorable environment for small businesses.
Last year across the country, 200,000 small businesses closed permanently due to the pandemic, and our region certainly saw its share of closures. However, small businesses in southwest Florida are bouncing back. In April of this year, WalletHub named Fort Myers the eighth-best small city in the nation for starting a business– out of more than 1,300 municipalities studied. Just to the north of us, South Bradenton ranked at #11, and also high on the list was Immokalee at #28. In fact, the Collier region that includes Immokalee, Naples, and Marco Island has more small businesses per capita than nearly any other medium or large metropolitan area in the entire nation. With 3.06 small businesses per 100 residents, Naples trails only Portland, Maine.
Make no mistake, large businesses are certainly the engine that keeps Southwest Florida’s economy moving. But it’s no secret that small businesses are more nimble and can shift gears and adapt their cultures more easily in a crisis. When the pandemic forced businesses to close their doors, many large companies struggled to change their employee handbooks, adjust their engagement processes, and alter their resource allocation processes. Meanwhile, some small offices were able to simply pack up their laptops and work remotely, family-owned restaurants and bars switched to carry-out models, and local retailers shifted to offering online ordering and delivery models. While businesses of every size learned to adapt, these small businesses had the agility to shift gears more quickly.
As employees nationwide continue returning to the office, it will be interesting to see how many of the cultural and procedural changes we all made will stick. My guess is that many larger businesses have lost a cultural connection with their employees, especially in locations where employees were working remotely—or not at all—for six months or more. Disengaged employees are more likely to search for new positions, and many large businesses may continue to struggle while their more durable, smaller counterparts thrive.
Here in Southwest Florida, we are continuing to grow, in part because of our environment that nurtures small, durable businesses. As a result, our commercial property market is thriving. If it’s time for your growing small business to relocate, the commercial property experts at Cushman & Wakefield | Commercial Property Southwest Florida have the knowledge, data, and resources to determine the best strategy for you. Contact us by calling 239-489-3600 or reach us using the form below.
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