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

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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?

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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

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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

Cushman & Wakefield, Featured Articles /

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

Media /

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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