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Six Critical Questions Part 4: What Are the Hottest Corridors in Southwest Florida?

This article is part four of a six-part series focusing on the six most critical questions about development and commercial property in Southwest Florida.  Southwest Florida has experienced remarkable growth over the last decade. This expansion is anticipated to continue through the next several years, with several new commercial zones in our region poised for significant development. While some of these corridors are still in their infancy, others are building on already visible growth and hold expectations for increased activity.  This brings us to question four in our six-part series:   What Are the Hottest Corridors in Southwest Florida?  There are seven primary areas of commercial growth in our region. Let’s discuss them, starting in Charlotte County and working our way south:  Punta Gorda Airport  The Punta Gorda Airport itself is expanding to elevate the passenger experience, and its neighboring area is also on track for development. This submarket’s growth will continue to surge, thanks to its convenient access to I-75, Tampa and Miami, as well as more affordable prices for land in Charlotte County. Dave Gammon, director of Charlotte County Economic Development, forecasts that 4 million square feet of commercial distribution, warehousing, and manufacturing will be delivered by 2026.  Burnt Store Corridor  Burnt Store Road in Northwest Cape Coral currently has 14 individual residential and commercial developments in various stages of activity. Plans include Hudson Creek, a mixed-use development north of Jacaranda Parkway. Hudson Creek will feature 2,500 single-family homes, 1,000 additional multi-family dwellings, 425,000 sf of retail and restaurant, 500 hotel rooms, and 150,000 feet of office space, as well as an assisted living facility and an educational institution. Ultimately, the numerous new development projects along Burnt Store Road will introduce 13,000 housing units and create jobs for 1,100 future employees.  Pine Island Road   Long-time Cape Coral residents have witnessed rapid growth along the Pine Island Road corridor for the past 15 years, and this trend will continue, particularly on the west end of Pine Island Road. Whereas retail had dominated prior growth in the area, current city planning records show a surge of multifamily development in the works. More than 5,000 apartment units are under construction or in planning along the 4.5 mile stretch between Santa Barbara Boulevard and Burnt Store Road.   Fort Myers River District  Fort Myers city leaders have long envisioned increased density in midtown and downtown for years, and that vision will soon be realized. Construction is underway for a 275-unit apartment development downtown, and numerous luxury waterfront apartments and condominiums are currently in the permitting process. Other plans for enriching the River District include an entertainment venue and food truck park, an intimate pedestrian park, and a 9-story hotel.  Skyplex  Considered Lee County’s most important economic development initiative, Skyplex is Lee County Port Authority’s non-aviation development project situated strategically between Southwest Florida International Airport and Daniels Parkway. The Skyplex master plan includes complementary clusters of development over a total of 8.15 million square feet. With hotels, retail, dining, and office space, Skyplex is expected to generate $2.9 billion in revenue and create 21,000 full-time jobs in the region.  Alico Road   Anyone who has traveled between Lee and Collier Counties on I-75 has been privy to the rapid growth of the Alico Road Corridor on both sides of the interstate. This area has seen 2.6 million square feet of commercial and industrial development over just the last three years. The airport/I-75/FGCU submarket is quickly becoming its own micro-city: a mixed-use commercial and industrial logistics hub supported by some of the largest demand generators in the region. The Lee County Economic Development Office anticipates that this surge of development will produce approximately 60,000 jobs within the next half-decade.  East Collier County  Collier County has always held a reputation as a premium, affluent community, but until the early 2000s, very little development had occurred east of I-75. That has certainly changed over the past two decades, with Collier County’s population quickly growing eastward, particularly along Immokalee Road and Oil Well Road. Ave Maria has flourished into a community of more than 4,000 homes, and no fewer than three villages are planned and approved between Naples and Ave Maria. In fact, projections suggest that the intersection of Immokalee Road and Collier Boulevard will evolve into Collier County’s population epicenter by 2030. Other commercial projects east of I-75 include Uline’s expansive 975,000 square foot regional distribution center and the new Great Wolf Lodge resort.    Answering Your Questions  Are you hoping to invest in the next hot commercial corridor in Southwest Florida? The Commercial Property Experts at Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) hold decades of experience understanding the dynamics of our commercial property landscape.  Our team is ready to answer your questions. To reach us, complete our online contact form or call 239-489-3600 to speak with an expert.     

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Six Critical Questions Part 3: Will We See an Avalanche of Distressed Assets in 2024? 

This article is part three of a six-part series focusing on the six most critical questions about development and commercial property in Southwest Florida.  Across the country, borrowers and lenders are bracing for a potential surge of distressed assets. According to a study by Cushman & Wakefield, the U.S. commercial property market exhibited an alarming $80 billion in outstanding distress as of Q3 2023. Even more concerning, the report showed more than $215 billion in potential distress on the horizon, surpassing the cumulative distress observed during the Great Recession.  However, Southwest Florida has been able to buck a number of national trends in commercial real estate over the last few years. This brings us to the third question in our series:  Will Southwest Florida See an Avalanche of Distressed Assets in 2024?  To understand the reasons why borrowers and lenders are concerned about distressed assets, it’s important to first understand how commercial loan interest rates contribute to distress levels.  Interest Rates and Distressed Assets  Commercial real estate loans are typically structured with short maturities, often in the neighborhood of eight to ten years, with a much longer amortization period. Consequently, property owners face a large balloon payment at the end of each loan.  If owners are unable to settle these balloon payments in full, they will refinance that balloon payment at current interest rates.   When the majority of existing commercial loans were established, historically low interest rates were in effect. Eight years ago, the average 10-year treasury yield was an astonishing 1.84 percent. Now, with rates more than double that, the cost of refinancing a commercial property balloon payment may not be worth the added cost of borrowing money. This is particularly true in markets where inventory is high and property values are declining.  Distressed Property in Southwest Florida  Here in Southwest Florida, we are experiencing some of the lowest levels of distressed commercial real estate in the state. Our area boasts a loan loss rate of only 11%, which falls below the state average of 12%. Southwest Florida’s resilience comes in part from our strong rental rates, which are helping to keep many properties profitable and net operating income (NOI) positive.  Will distress levels rise in Southwest Florida?  Most likely, although not to the potentially catastrophic levels we may see in other parts of the country. Maturing loans will exert pressure across all product types, especially middle and low-quality office assets. However, rent growth has lifted NOI considerably over the life of the average loan, meaning we shouldn’t anticipate an avalanche of distress. Southwest Florida borrowers who secured financing prior to 2019 have likely accumulated enough appreciation to make their property’s current values higher than their debt balance. Coupled with low vacancy rates, strong job growth, and favorable net migration, our region will likely outperform most of the rest of the country.      Are you a commercial property owner with a loan on the cusp of maturity? If so, the Commercial Property Experts  at Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) can help you determine your best next move in our current economic climate. CPSWFL has the data, analytics, and local experience to help you understand the dynamics of our region’s economic potential and commercial property landscape. Complete our online contact form or call us at 239-489-3600 to speak with an expert.     

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Six Critical Questions Part 2: What Impact Will Interest Rates Have on Commercial Real Estate?

This article is part two of a six-part series focusing on the most critical questions about development and commercial property in Southwest Florida.   The volume of commercial real estate transactions in Southwest Florida decelerated over the last year, likely attributable to number of factors. These variables include escalating construction costs, scarcity of land for development, increasing insurance premiums, and growing interest rates.   Yet, despite this slowdown in commercial sales velocity, prices are still on the rise.  This brings us to the second critical question in our six-part series:  What Impact will Interest Rates Have on Southwest Florida Commercial Real Estate?  Undoubtedly, interest rates have a visible influence on the commercial real estate investment market. Elevated interest rates mean a hike in the cost of borrowing money and can ultimately dampen demand from developers and investors.  Interest Rates and Treasury Yields  Commercial mortgage rates are typically based on the 10-year treasury. Treasury yields peaked at 4.92 percent in October 2023 and currently hover at about 4.3 percent, roughly 80 basis points higher than we saw last April. Such rates can pose hurdles for properties that can’t generate enough cash flow to support high-leverage mortgages. Fortunately, rent growth should soften the impact of pricier borrowing costs on balance sheets.  The Federal Reserve Bank escalated interest rates 11 times in 2022 and 2023 to counteract skyrocketing inflation. Since inflation began to stabilize in mid-2023, the Fed has left rates unchanged in six of its last seven sessions. Currently, the U.S. inflation rate stands at 3.2 percent, and although the Fed disappointed many by announcing that it’s unlikely to reduce interest rates in the immediate future, experts still anticipate at least one rate cut before the end of the year.   More Interest Rate Stability Coming  We anticipate much more stability in interest rates from this point forward. As a result, property values in our region are poised for marginal growth, thanks to low inventory and high rent potential. However, we shouldn’t expect to see sales volume rebound to previous levels for another year to 18 months.    Are you prepared to take advantage once interest rates begin to fall? Whether you’re a property owner looking to position your asset for sale or a potential buyer seeking opportunities in our marketplace, the Commercial Property Experts at Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) have the data, analytics, and local experience to assist you with your needs. Complete our online contact form or call CPSWFL at 239-489-3600 today to speak with one of our experts.   

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Six Critical Questions Part 1: Is Southwest Florida Headed for a “ Doom Loop?

The Urban Land Institute’s inaugural Southwest Florida Focus Real Estate Forum recently shone a spotlight on responsible land use and sustainable community development in our region. I was honored to be a featured speaker at this event, which brought together industry leaders, professionals and stakeholders to discuss development trends in Southwest Florida. This article is part one of a six-part series discussing some of the most important points from that presentation, which focused on the six most critical questions about development and commercial property in Southwest Florida for the remainder of 2024 and beyond. As property values, interest rates, and inflation have all spiked over the past few years, skeptics have worried about a seemingly inevitable downturn like the one we experienced during the Great Recession. This brings us to our first critical question: Is Southwest Florida headed for a “doom loop?” The term “doom loop” might be new to some, but its implications are clear: it describes a cycle of events that spirals downward into an economic slump. While some national economic indicators may offer reason for concern on the surface, the prospect of a doom loop is not likely on the horizon for our region because of our regional strengths. Regional Economic Indicators Southwest Florida continues to show robust job growth with the addition of more than 11,000 jobs in 2023, keeping our unemployment rate below the national trend. In Lee County alone, there has been a four percent surge in new businesses, and projections show every sector growing by one to three percent annually over the next five years. Tourist tax revenues are climbing as well, thanks to our successful and ongoing rebound from Hurricane Ian. As consumer confidence improves, residents appear willing to increase their spending levels, with consumer sentiment numbers also on the rise from 2023. Regional Commercial Development Trends Although other parts of the country are plagued with commercial vacancies, Southwest Florida’s rapid residential and business growth have kept vacancy numbers very low. Nationally, nearly one in five (19.7%) offices sit vacant, but our region’s office vacancy rate stands at a paltry 4.1 percent. Local industrial and retail vacancy rates are also well below the national level. Although FGCU’s Southwest Florida Real Estate Report indicates that commercial property sales may have plateaued, our limited supply and robust demand suggest that the cost of renting commercial space will likely continue to grow in Southwest Florida. This differs greatly from what our region experienced in the early 2000s. At that time, speculative investments overwhelmed the real estate and construction markets, producing excess inventory and paving the way for economic collapse. Southwest Florida’s Resiliency Although our region has certainly faced challenges over the past two years, current economic indicators show that Southwest Florida should continue to be resilient, even as other parts of the country may begin faltering. However, economic cycles are natural and what goes up must inevitably go down. When our region does eventually face a downturn, we anticipate a soft landing, not a recession, in Southwest Florida. Do you have questions about Southwest Florida, its economy, or our commercial development landscape? Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL) has the data, analytics, and local experience to help you understand the dynamics of our region’s economic potential.  If you’re a business owner, developer, or investor looking for an opportunity in our current market, reach out to the Commercial Property Experts at CPSWFL are ready to answer your questions. Complete our online contact form or call us at 239-489-3600 to speak with an expert.  

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Gary Tasman and Junior Achievement of Southwest Florida’s JA Inspire Event

We are excited to feature a special video with Gary Tasman, CEO and principal broker of Cushman & Wakefield | Commercial Property Southwest Florida a proud board member of Junior Achievement of Southwest Florida. This video highlights the remarkable JA Inspire event, a transformative career expo designed to showcase the potential career paths for students in Collier and Lee Counties. Through JA Inspire, local students engage directly with employers, learn about the qualifications needed for Southwest Florida’s booming industries, and discover how to gain the experience required for future employment. This event is crucial in building a well-trained workforce to support our region’s growth. Watch the video to see how Gary Tasman and JA Inspire are making a real difference in the lives of our young people. Learn more about how you can contribute to this vital initiative here.  

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Double Impact: CPSWFL Wins Consecutive CoStar Awards for Southwest Florida’s Economic Expansion with Lansing Building Products

The headlines in early 2024 were eye-opening for many: “Southwest Florida Braces for Population Surge as Lee County Nears One Million Residents.” This forecast stemmed from a January report by the University of Florida’s Bureau of Economic and Business Research (BEBR). The data projected that Lee, Collier, and Charlotte counties would witness some of Florida’s most significant population increases through the end of the decade. The BEBR’s most optimistic projections suggest a combined population of more than 1.7 million by 2030, marking a 23.6% increase. The ripple effect of this rapid expansion is evident. As we’ve seen, population surges fuel economic progress through a domino effect. Newcomers necessitate the construction of new homes, roads and other infrastructure, schools, medical facilities, grocery stores, and so forth. The ensuing construction boom then drives job creation and ultimately attracts even more residents to our region. Southwest Florida’s prospects for business development and prosperity have captured attention far beyond our local media reports. Over the last several years, the area has attracted many new businesses while also encouraging existing enterprises to expand their presence. One such company is Lansing Building Products, a construction wholesaler with a network of 113 locations in 35 states. Last year, Lansing signed a 66,017 square-foot lease, brokered by Gary Tasman and Shawn Stoneburner of Cushman & Wakefield | Commercial Property Southwest Florida (CPSWFL). Lansing’s presence is a further reflection of our community’s economic expansion, and will be crucial for driving future regional growth. Lansing provides exterior building products, including windows, doors, roofing and insulation to professional contractors. Material procurement is often a hurdle for builders who strive to keep projects on track, especially when demand is high. Lansing will serve as a dependable source to ensure local construction projects proceed without unnecessary delays to satisfy the needs of our surging population. Lansing pinpointed Southwest Florida as a market with thriving demand for residential construction, making our area optimal for their expansion. CPSWFL helped facilitate their plans through the brokerage’s deep understanding of the local market.  Initially, Lansing was poised to lease a modest space that would have been adequate to meet their initial needs. However, Lansing revised their strategy and sought out larger accommodations after analyzing local market data with CPSWFL.  “We showed them the market analytics, the growth trajectory of Southwest Florida, and all of the projects and construction currently in planning,” explains Gary Tasman, CPSWFL’s CEO and principal broker. “We helped them better understand Southwest Florida and identify where they needed to be.” That location turned out to be a strategically positioned warehouse facility in the Suncoast Commerce Center. The location, in close proximity to I-75 near Luckett Road, will enhance Lansing with getting their products into the market and then onto construction sites.  “Our partnership with Lansing is pivotal because of what they represent to Southwest Florida. They are essential for our continued development and ongoing recovery from Hurricane Ian,” says Tasman. “By supporting Lansing, we’re also helping to address our community’s needs, and promote expansion and economic vitality throughout the region.” Because of the Lansing transaction’s potential impact on Southwest Florida’s growth and prosperity, CPSWFL was recently awarded the CoStar Impact Award for Lease of the Year in the Southwest Florida market. This marks CPSWFL’s second consecutive year receiving this prestigious award, which honors the most influential commercial real estate transactions and projects across 128 major markets in the United States, Canada, and the United Kingdom.  With nearly 200 commercial sales, leases, and consulting assignments closed annually, CPSWFL takes pride in its role in shaping the regional landscape by recognizing and tackling community challenges. The team’s mission is to not only practice real estate with efficiency and precision but also to leave our community a better place. CPSWFL’s partnership with Lansing is a testament to this commitment. Cushman & Wakefield | Commercial Property Southwest Florida is invested in the growth of our region. If you are an investor, developer, or business owner with interest in the booming Southwest Florida market, the Commercial Property Experts at CPSWFL have the knowledge and experience to help guide you on your journey. Contact our team of Commercial Property Experts by calling 239-489-3600, or contact CEO/Principal Broker Gary Tasman at gtasman@cpswfl.com

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Cushman & Wakefield|Commercial Property Southwest Florida Unveils Cutting-Edge Website Redesign

Cushman & Wakefield | Commercial Property Southwest Florida, a leader in strategic commercial real estate solutions, proudly announces the launch of its newly redesigned website.  The new website is poised to enhance user experience and accessibility for clients, partners, and industry professionals worldwide. The revamped website features a sleek and modern design, offering visitors an immersive and intuitive browsing experience. With improved navigation and functionality, users can easily explore the full spectrum of Cushman & Wakefield | Commercial Property Southwest Florida’s services, insights, and property listings. Key highlights of the new website include: Streamlined Navigation: Optimized menus and navigation tools allow for seamless exploration of services, markets, and resources. Enhanced Search Capabilities: Robust search functionality enables users to quickly find relevant properties, market reports, and industry insights. Responsive Design: The website is optimized for desktop, tablet, and mobile devices, ensuring a consistent and engaging experience across all platforms. Interactive Features: Engaging multimedia content, including videos, infographics, and virtual property tours, provides visitors with dynamic insights into real estate trends and opportunities. Localized Content: Tailored regional content and market insights cater to the diverse needs of clients and investors across different geographic locations. “We are ecstatic to unveil our redesigned website, which reflects our commitment to innovation and excellence in serving the evolving needs of our clients and partners,” said Gary Tasman, CEO & Principal broker at Cushman & Wakefield| Commercial Property Southwest Florida. “This enhanced digital platform will empower users with greater access to our comprehensive suite of real estate services and market intelligence, enabling informed decision-making and driving success in today’s dynamic market environment.” Now that you’re on our new website we hope you’ll enjoy exploring the latest offerings and insights from one of the world’s leading real estate services firms.

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