Month: April 2022

By Gary Tasman The transportation corridors around Southwest Florida International Airport (RSW) have been home to some of the fastest-growing development projects in our region during the past 10 years. While we’ve previously discussed some of the exciting commercial improvements near the airport, we haven’t focused on the airport itself, and how it both impacts and reflects our area’s fast-growing economy. Continued Growth at RSW For the third straight month, RSW has posted passenger numbers above 1 million, a trend unseen since before the pandemic in late-2019 and early-2021. While most airports around the nation are still struggling to return to their pre-COVID numbers, RSW’s passenger traffic continues to steadily climb. Ben Siegel, executive director of the Lee County Port Authority, estimates that only about 10 to 15 percent of our nation’s airports have truly recovered from the pandemic and RSW is the clear leader in post-COVID passengers. “In 2021, we had the busiest year in the history of the airport with 10.3 million passengers,” explained Siegel on our April “What’s Developing in Southwest Florida?”[LINK] podcast. In terms of the number of travelers at RSW since the start of the pandemic, Siegel adds, “We went from being 95 percent down to the fastest recovering airport in the country. We are now fully recovered and, currently, 2022 is exceeding 2021.” Economic Growth and Passenger Traffic Airports are instruments of economic growth and the recovery of passenger traffic at RSW is synergistic with the evolution and recovery of our region. Our local economy would not be developing at its current rapid pace if not for the ease of travel to Southwest Florida. As more people have visited Lee and Collier counties and discovered our outstanding beaches, recreation, education and overall quality of life, more business owners and remote employees have made the decision to move here permanently. Those new residents, in turn, produce additional demand for the airport. The synergy between airport and economic growth is quantifiable. Economist Jan K. Brueckner found that a 10 percent increase in airport passenger traffic leads to a 1 percent increase in service industry employment in that metropolitan area. But airplanes are more than just passenger vehicles — they also move cargo from point to point and RSW is seeing expansion in this arena as well. In 2019, the airport handled nearly 35.7 million pounds of freight, a number that climbed 16.5 percent to more than 41.5 million pounds by the end of 2021. Building for the Future To accommodate the anticipated continued growth of both passenger and freight traffic, the Port Authority has adopted an aggressive and robust capital improvement program that will see a billion dollars in airport investment over the next decade. The plans begin with a three-year Terminal Expansion Project that has already started. This expansion will simplify the TSA screening process, and both increase and improve the amenities offered to passengers. Other long-term capital projects on the horizon include adding a new concourse with 14 additional gates, an expansion of parking and rental car services, as well as the construction of a parallel runway. A new $80 million Airport Traffic Control Tower was completed in December, with the cost split between the Lee County Port Authority and the Florida Department of Transportation. Building a tower without funds from the FAA is unusual, if not entirely unheard of, but the Port Authority recognized the need to construct a new tower as the lynchpin for its future second runway. To diversify its revenue stream and generate capital for future projects, the Port Authority is continuing to develop Skyplex, a commercial development area on the north side of the airport, which offers a destination experience with Class A office space, hospitality and entertainment, transportation logistics and support and more. At Cushman & Wakefield |Commercial Property Southwest Florida, we are excited to partner with the Lee County Port Authority on the master planning and ultimate development of Skyplex. With more than 1,000 acres of land that can be developed for both aviation and non- aviation, Skyplex has the potential to become a truly special destination for residents, travelers and Southwest Florida businesses. Skyplex offers an outstanding opportunity for commercial developers along a highly visible transportation corridor. The property is strategically located in a Foreign Trade Zone and has 1,150 acres zoned for aviation, as well as multi-use commercial and light industrial development. This property will only become more desirable for investors, developers and business owners as RSW continues to grow. For more information about commercial development opportunities around Southwest Florida International Airport, reach out to the Commercial Property Experts at Cushman & Wakefield |Commercial Property Southwest Florida at 239-489-3600 or by contact-us.

By Gary Tasman Utter the words “industrial property” to someone outside the world of commercial real estate, and they’re likely to picture concrete jungles with enormous drab buildings, smokestacks and air pollution. In some parts of the country, that might be an accurate impression. However, when we talk about industrial property here in Southwest Florida, smart developers and investors realize that a very different picture is emerging. Industrial real estate is a broad term that covers commercial uses like manufacturing and production, research and development, and storage and distribution. Industrial real estate demand is on the rise, driven by consumption, trade, transport, and e-commerce.  Cushman & Wakefield’s U.S. Industrial MarketBeats Report for Q1 2022 shows exactly how popular these properties are. For the sixth straight quarter, demand for industrial property is outpacing supply, driving the vacancy rate to an unprecedented 3.3% across the country. Here in Southwest Florida, the industrial vacancy rate is a stunning 1.7%. Although there are nearly 2.5 million square feet of industrial buildings under construction in our region, high demand for industrial property is expected to continue for the next few years. Industrial Market Drivers in Southwest Florida What’s driving our industrial real estate market surge? To start, changes in the supply chain and delivery trends during COVID restrictions have made warehouses, self-storage facilities, and multi-million square foot fulfillment and distribution centers highly-prized properties. Thanks to our strategic location between Tampa and Miami, Amazon, Uline, and FedEx have built or are building major facilities in Lee, Collier and Charlotte Counties. With both Southwest Florida International Airport and the Punta Gorda Airport expanding, we can expect to see continued growth in storage, logistics, and transportation. But supply chain reconfiguration is only part of the equation. Despite our region’s reputation as a haven for vacationers and retirees, the industrial sector in Southwest Florida is actually quite diverse and developing. Of course, construction has always been vital to our region, but our industrial sector reaches far beyond bricks and mortar. Thanks in part to our region’s aging demographics, medical manufacturing is a large part of the industrial sector. Companies like Lee County-headquartered NeoGenomics, which conducts diagnostic, prognostic and predictive cancer testing all over the world, are expanding their presence in Southwest Florida. Arthrex, a global medical device manufacturing company, is based in Collier County with a large logistics center in Lee County. Numerous smaller medical and biotechnology companies have followed their lead and dot the Southwest Florida landscape. Whether producing medical devices or consumer products, light manufacturing is on the rise in our region, absorbing millions of square feet of industrial space. Like the region’s medical manufacturers, these companies often produce products vital to the Southwest Florida economy. Manufacturers like MY Shower Door/D3 Glass and Storm Smart thrive in part because of Florida’s explosive residential growth. As long as residents continue to flock to Southwest Florida, we should anticipate more manufacturers in our area that produce construction supplies and similar products. Opportunities in the Industrial Market With the manufacturing sector growing across Southwest Florida, demand for industrial property should remain high for the next several quarters. Supply chain issues have slowed the pace of construction, and thus delayed the pipeline of new industrial properties emerging on the market. However, even after supply and demand reach a state closer to equilibrium, there are many benefits to owning industrial property. Industrial properties tend to garner longer-term tenants, creating a more stable income stream.  Industrial spaces typically need less maintenance and fewer amenities than other types of commercial spaces. With low tenant turnover and maintenance costs, these properties have the potential to produce higher yields for investors. The industrial real estate market in Southwest Florida—and across the nation—is experiencing its highest demand in history. Are you an industrial property owner looking for an opportunity in our current market?  Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) has the knowledge, data, and resources to stay abreast of current commercial real estate trends in our region. The Commercial Property Experts at CPSWFL are ready to assist you with determining your best strategy for your property. Contact us by calling 239-489-3600 or reach us by contact-us.