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By Gary Tasman Real estate is hot once again, with housing prices skyrocketing across the nation. Redfin reports that median home sale prices across the nation are 17% higher than they were just one year ago. Southwest Florida once again has one of the hottest real estate markets in the nation. In 2020, sales of existing homes increased by 27% in Collier County and 14% in Lee County. Ordinarily, that news would be reason for celebration. However, many homeowners in our region are feeling déjà vu and worry that current conditions represent a housing bubble like we saw in 2007. Southwest Florida was the epicenter of the subsequent housing crash and foreclosure crisis, both of which led to the Great Recession. One out of every ten Lee County homeowners faced foreclosure between 2008 and 2013. Many of those who lost their homes, jobs, and savings are now wondering if the current housing market is in another bubble that will burst in the same dreadful way. While current conditions certainly seem reminiscent of the housing boom before the Great Recession, the news is actually much less dramatic. Most economic experts agree that a market correction will come, but it will be nothing like the severe housing market crash we experienced in the aughts. That’s because the conditions that created the last housing bubble are very different from the drivers that created the current housing situation. The 2007 bubble was caused by a number of factors, including a largely unregulated lending environment. Mortgage lenders were offering subprime loans to homebuyers at well above the home’s value. Banks were extending credit and zero-money down loans to buyers with little ability to repay. Cash-strapped buyers were choosing adjustable-rate mortgages, gambling that they’d be able to sell their homes before interest rates ballooned. Since then, the Dodd–Frank Wall Street Reform and Consumer Protection Act has overhauled financial regulation. Though portions of Dodd-Frank have been amended or repealed since 2010, it continues to regulate many sectors of the financial industry in the hopes of avoiding another financial disaster. The current housing boom has been fueled by more familiar economic factors, primarily supply and demand. The days of seeing dozens of “for sale” signs on every residential street are long gone. In fact, today we’re facing a housing shortage. For the past five years, homebuilders in the U.S. have constructed just 1 million homes a month. By comparison, in 2006 we were building up to two million homes per month. That trend came to a grinding halt during the Great Recession and never returned to pre-recession levels, creating a shortage of new homes. And unlike during the housing crisis, people who lost their jobs during the pandemic have been able to keep their homes thanks to generous mortgage forbearance programs, meaning fewer re-sales are on the market. At the same time, demand for housing has remained high. Near-historic lows in interest rates mean that buyers can borrow more home for their money. A record number of buyers are now purchasing second homes. Adding to the demand, Millennials, the largest generation in the country, have more buying power than ever. With the majority of Millennials now in their 30s, they are ready and able to purchase. While it’s easy to look at the current real estate boom and think history is about to repeat itself, the 2021 boom is the result of sound economic fundamentals. The market has responded to historically high demand and a low inventory of available homes. Yes, there will likely still be a market correction, either because of rising interest rates, rising housing inventory, or rising prices that are out of the reach of middle-class homebuyers, but a housing bust like we saw nearly fifteen years ago is highly unlikely. A downturn will be more likely the result of rising inflation or stagflation than because of speculative investment. Southwest Florida’s popularity in the housing market and population explosion have also made a significant impact in the commercial property market. Our area’s population boom has led to a high demand for infrastructure, medical services, retailers, dining establishments, and more. To learn how you can take advantage of the demand created by our current market, contact the commercial property experts at Cushman & Wakefield | Commercial Property Southwest Florida. Whether it’s time for you to sell, or you’re just considering your options in our current commercial real estate market, 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 contact-us.

By Gary Tasman Like most Americans, your grocery shopping habits probably changed significantly during the COVID-19 pandemic. Social distancing and capacity restrictions, limited hours, and even limited stock forced us to shift the way we shopped—and forced retailers to find new ways to provide our essential goods and services. Half of U.S. consumers now say they purchase at least some of their groceries online, either through delivery services such as Shipt and Instacart, from online retailers like Amazon, or via BOPIS (Buy Online, Pickup In Store) services. But with vaccinations now widespread and our nation slowly returning to normalcy, will consumers rush back to supermarkets or will traditional grocers expire as we continue to shop from the comfort of their home? An argument can be made on either side. On one hand, grocery delivery and pickup services earn excellent reviews from busy consumers, and were surging in popularity well before the pandemic rendered them a necessity for many. Alternatively, 72% of consumers still consider an in-store shopping experience extremely important to them. Consider the number of times you’ve gone to a particular store because of an experience important to you, like product samples on weekends, a specialty bakery item, a diverse or unique produce selection, or even assistance loading your vehicle. Each of these services nurtures our loyalty to the in-store experience. With consumers wanting both convenience and an in-store experience, smart retailers are looking for ways to balance everything their customers want. WD Partners, a customer experience strategy firm, has released its vision for the grocery store of the future, and its hybrid model combines convenience and engagement to create limitless options for shoppers. Those seeking convenience will benefit from BOPIS fulfillment, order kiosks, and drive-thru pickup options, as well as an emphasis on prepared foods and pre-packaged meals in a grab- and-go section. The grocery of the future also satisfies experience-focused customers with a farmers’ market-style produce section, demonstrations in an experiential showroom, and comfort zones like an in-store coffee shop or outdoor seating area. Many grocers currently offer some, but not all, of these features, and have earned devoted customers as a result. An excellent example is Whole Foods, which has developed a near cult-like following with its focus on local produce, chef-prepared family meals, healthy and organic foods, and free delivery for Amazon Prime members. Specialty grocers aren’t just popular with residents—they’re also a favorite of tourists who rent family homes through services like Airbnb or VRBO. The full kitchens found in weekly and monthly vacation rentals are popular with families in search of a relaxed, homey experience in a tropical locale. Prepared, packaged, and grab-and-go meals are perfect for these vacationers who wish to maximize both their time and budgets while still enjoying Southwest Florida’s lifestyle. But while grocers such as Whole Foods, Fresh Market, and Sprouts Farmers Market are popular with both residents and visitors, they are anything but plentiful in our region. Lee and Collier Counties possess only a sprinkling of each of these stores, mostly along US-41. I anticipate this trend will change in coming years, as our region’s population and popularity among vacationers continues to grow. One area ripe for a specialty grocer is Cape Coral, Florida’s largest city between Tampa and Miami. Despite being one of the state’s fastest-growing municipalities, large specialty grocers have yet to invest in Cape Coral. For more than a decade, Publix and Walmart have dominated the city’s grocery market. However, recent additions such as Aldi and Winn-Dixie have shown that there is still room for competition. The Cape’s booming population, as well as its 3,200 vacation rentals, make it a prime location for a new grocery concept to blossom. The COVID-19 pandemic has altered the way we experience retail, and grocery stores are no exception. Grocers will continue to adapt to our changing preferences, creating hybrid centers that combine both convenience and customer experiences. Traditional grocery stores will need to invest in reinventing themselves if they want to stay fresh in this evolving marketplace. Whether it’s time for you to sell, or you’re just considering your options in our current commercial real estate market, 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 contact-us.

By Gary Tasman The Southwest Florida commercial real estate market is white-hot, and many property owners are hoping to take advantage of high values by selling their assets. While some buildings and land will be snapped up quickly by eager buyers, other properties are likely to languish on the market for months—or even longer—with little interest from potential investors. When a property is lingering on the market, it’s time for the broker and property owner to have a potentially uncomfortable conversation about the causes. Generally speaking, there are four reasons why your commercial property isn’t selling. It’s not priced to sell at market value. Properties can have many different “values.” Insurance value, estate value, tax value, and market value are all different and can vary significantly. A property’s market value, simply put, is the amount that a willing seller would accept, and a willing buyer would pay, given proper time and exposure. Market value is a moving target, changing based on the supply of properties on the market, economic conditions, the property’s features and benefits, and numerous other factors. A reliable broker uses local data and trends, combined with research and experience, to assess the market value of a property and position it to sell. People don’t know it’s for sale. Price and positioning are the two most important variables when it comes to selling a property. More than half the properties that don’t sell in any given market either aren’t priced or positioned correctly. If you’re priced at market value but your property isn’t moving, that means potential buyers may not be aware of it. Awareness is a large part of positioning. Your broker isn’t just responsible for making sure people see your property — they’re also responsible to make sure the right people see your property. In other words, you probably won’t succeed if you just drop a “For Sale” sign on your property or list it online and wait for a sale to happen. Your broker should have a vision of your ideal buyer, and use their sphere of influence to ensure they know about your property. Brokerages like Cushman & Wakefield | Commercial Property Southwest Florida have relationships in every sector of the commercial real estate market and are ready to position your property for maximum exposure to its most likely buyers. The property isn’t in ideal condition. Regardless of whether you’re selling property or land, the condition of your property is vital, and not just because you want to make a good first impression. The only reason people buy investment property is because they believe it will be worth more in the future than it is today. If an investor believes they’ll need to make a large capital infusion in your property to make it profitable, they’re likely to pass on it. To prevent buyers from worrying about your property’s condition, you need to show it in the best condition possible for its market. While this may produce short-term expenses, it will also reduce the investment risk for buyers. Property investors will recognize its long-term potential for higher lease rates and lower capital expenditures, increasing your market demand and likely offsetting your costs. You’re not truly motivated to sell. Real estate brokers define a “good listing” as one with a motivated seller. Ask yourself why you want to sell, and how important it is for you to rid yourself of this property. Perhaps you’re selling because of a life change, a new opportunity, a tax-efficiency strategy, a need for renovation, or even just a hunch that the market is about to take a turn. The level of a seller’s motivation is often closely tied to the ease a broker has in listing and selling a property. This is where the conversation between broker and seller can get uncomfortable. If it’s important for you to sell quickly and break free from the property, you may need to be more flexible. Determined sellers are often more willing to negotiate on price and more flexible in the sale terms they offer. They understand the fluidity of the market and are prepared to listen to the advice of their broker. If you’re not motivated to sell your property quickly, consider why you want to sell your property at all. You may want to consider another strategy. Full service commercial real estate agencies like Cushman & Wakefield | Commercial Property Southwest Florida have experience in leasing, property management, facility maintenance, and financing, and can help you determine the best tactics for producing revenue from your commercial property. Whether it’s time for you to sell, or you’re just considering your options in our current commercial real estate market, 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 contact-us.