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Gary Tasman, CEO & Principal Broker at Cushman & Wakefield | Commercial Property SWFL Talks Trends in New Retail Centers

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THE TREND IN NEW CENTERS The new Cape Coral Dunkin’ anchors the east end of a five-unit center, the latest in an area trend of mini-strips. “They’re very, very profitable,” said Gary Tasman, CEO and commercial real estate broker with Cushman & Wakefield in Fort Myers. His firm has represented similar centers in Fort Myers and Cape Coral. “They’re really, really popular. They’re usually located next to a demand generator but not in the same center. It could be an apartment complex. It could be a grocery store.”  To Read More Click Here

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A look back at 2018 and looking ahead in 2019:

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A look back at 2018 and looking ahead in 2019: Our team recently published the Southwest Florida Year End MarketBeat Reports for Office, Industrial and Retail markets. All three sectors of the Southwest Florida market remain tight with overall vacancy rates below 10% across the board. A trend toward redevelopment of functionally obsolete buildings into more dense and diverse mixed-use projects surfaced from this research as the hottest opportunity in CRE in Southwest Florida in the coming year. In summary: Office: New build-to-suit and owner-occupied construction is expected to increase due to obsolescence of existing inventory. Vacancy rates and asking rents may stabilize into the start of 2019 as office demand slows and tenant improvement costs increase. Gartner Campus South expansion is one of the largest under construction projects in the S. Fort Myers/San Carlos submarket of Lee County. Watch for several large office projects to be announced I the next few quarters. Industrial: Supply creates demand. With over a million square feet of new industrial space under construction, Cushman & Wakefield l Commercial Property Southwest Florida expects to see demand increase in 2019. Amazon leased 60,000 SF of space being the largest transaction affecting absorption for the year 2018. With the most new inventory, warehouse/distribution buildings will lead leasing activity for the year to come. Retail: Although, there have been several big-box closures and bankruptcies as e-commerce growth continues, Whole Foods opened in the fourth quarter 2018 and Ollie’s Bargain Outlet expected is to occupy 42,250 square feet (sf) this year (in 2019). Big box closures converting to office or other uses that need high parking ratios will increase. One of the largest 2018 completions in retail was Daniels Marketplace. Top trends that will impact the commercial real estate sector in 2019. Some highlights on what to watch in Commercial Real Estate include: Is a Recession on The Way? There Are Mixed Signals: Yield curves are compressed, but only one out of nine indicators suggest that CRE pros needn’t worry too much, at least for now, about a recession. Jobless claims remain low and consumer confidence is strong. Co-everything: Everything from co-retail – developments focused on entertainment, cultural and flexible spaces – to co-working arrangements among separate companies will become even more popular in 2019. Watch for co-living concepts to emerge and become mainstream. Low Unemployment, Labor Shortages and Rising Wages: Low unemployment will continue to drive up wages while increasing the current labor shortages. Micro-transportation Effect: There will be a place for non-traditional transportation such as; scooters and shared bicycles. In cities like Fort Lauderdale, where approximately 4,000 units are about to come online, introducing scooters to the market will substantially help reduce the number of cars on the road. In 2018, Lime launched in Miami, Fort Lauderdale and Orlando. Punta Gorda has joined the trend by supplying free loaner bicycles found at numerous locations throughout the community made available by the city. As more users continue to embrace programs like Lime as an alternative mode of transportation, watch for the service to continue to expand statewide. Lack of Industrial Space: Slow rebalance in vacancy should be evident, while rents trend upward with new construction deliveries. Warehouse site selection will focus on workforce, not highways. Watch for development of new self-storage facilities, locally. Opportunity Zones: Expect to see deals in opportunity zones transact in the first and second quarters. The combination of fears of rising interest rates and clarification on opportunity zone rules will certainly be a catalyst for transactional activity in Southwest Florida. Yes! I want to be the first to get future Market Updates!

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Is the Coworking Trend Moving Towards SWFL?

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Is the Coworking Trend Moving Towards SWFL? By Gary Tasman CEO & Broker Cushman & Wakefield Commercial Property Southwest Florida Coworking spaces are becoming the norm in many metropolitan cities. According to the 2017 Global Coworking Survey, it is estimated that more than 1.1 million people went to work at 13,800 coworking spaces worldwide. Coworking spaces are defined as membership-based workspaces where diverse groups of freelancers, remote workers, and other independent professionals work together in a shared communal setting. Coworking space memberships have experienced steady growth since the idea became reality. Benefits of Coworking Coworking is beneficial for small business owners who are looking to work in a cooperative space without breaking the bank. In the past, businesses could not afford to acquire space on their own and then incur administrative expenses on top of that. Advancements in technology allow this model to work and creates an ultra-efficient workspace that is open to collaboration. Unlike a traditional office, coworking spaces consist of members who serve a wide variety of different companies, via a diverse range of ventures and projects. The concept also provides a physical workspace for those whose only alternative is working from home. Professionals can benefit from sharing creative ideas, knowledge, resources and services. Coworking facilities play a role in keeping local talent by nurturing one’s skillset and providing necessary resources and services to support business growth. Another benefit is work-life balance. Independent work spaces offer an option for entrepreneurs to work where they live. With an increase in popularity, it is sure to be a trend that cities of all sizes will soon experience, if they have not already. Emerging Trend The emerging coworking market is here to stay and is a growing trend. It can be described as the new version of the “executive suite,” but on steroids. WeWork, a Fortune 500 company, is credited with introducing the coworking concept and jumpstarting this trend. The business model is similar to that of a fitness club model, in that no matter what city you are working in, there is a WeWork facility that you can access. The coworking model is also very attractive to larger companies who have a mobile workforce but want to remain collaborative. Coworking space is also a popular choice among start-ups. WeWork has grown to become the largest tenant in New York City, since its inception in 2008. Impact on Southwest Florida The concept is beginning to move this way, and the region should be thinking and preparing for its arrival. Coworking is projected to grow to 3.8 million people by 2020. Even a small percentage of this number is enough to see an impact on local market conditions. Although Southwest Florida has seen its fair share of coworking workspaces pop-up recently with the addition of Endeavor Innovative Workspaces, Venture X and the upcoming H2 Innovation Center, the area is still behind the coworking trend curve. The office structure as we know it will change dramatically with the new workspace concept. Characteristics of a productive office will be redefined to identify the value created when using the workspace model. Moving forward, flexibility is the key to minimizing the effect coworking spaces will create. Businesses that adapt and position themselves to respond to market conditions faster will benefit the most. The Southwest Florida commercial real estate office sector is set to feel the effects more than other industry sector. The introduction of coworking spaces will trigger/create a domino effect within ancillary areas of the real estate market, ultimately prompting more business efficiency. Parking ratios will change, as there will be no need for expansive employee parking lots. Building designs will change to reflect less space needed for occupancy by a business, thereby, causing a reduction or elimination in long term leases. Additionally, predictive real estate value models will change, as they are generally modeled by long-term real estate revenue, such as leases. As coworking spaces continue to evolve throughout Southwest Florida, the long-term effects will continue to present themselves. In the meantime, the trend does not seem to be slowing down anytime soon, so the regional businesses should prepare to respond quickly in this everchanging market. For expert advice on the most productive ways to respond, contact Cushman & Wakefield Commercial Property Southwest Florida.

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Multifamily Land Acquisition Report

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Multifamily housing continues to be one of the most successful commercial real estate categories since the economic rebound. While one-quarter of renters lost their homes due to foreclosure or are shackled by student debt and a tight job market, others are making a conscious choice to rent. For those considering multifamily investment or development, now may be the time. View the full report from Gary Tasman here:Multifamily Land Acquisition Report

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Best Practices In Choosing A Property Management Company

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Choosing A Property Management Company By Gary Tasman CEO & Principal Broker, Cushman & Wakefield Commercial Property Southwest Florida, LLC If you own commercial real estate, chances are, you will require the services of an experienced, professional property management firm to represent your interest. More than 10,000 commercial property management companies do business in the U.S., ranging from single-person operations to national companies employing thousands of people. Hiring the right property management company is just as important as hiring the right broker or employee, and it can be just as challenging. Role of a Property Management Company Property management professionals perform a wide variety of tasks such as collecting rent, supervising vendors to maintain the property, ensuring vendor services are competitively bid, paying taxes on the property and providing property inspections, just to name a few. An experienced commercial property management firm does more than just manage your property. Property Managers have a fiduciary duty to the property owner and should always look for ways to increase your property’s value. Good property managers help increase your net profit by maximizing the potential rent income, and minimizing operating expenses. Caveat Emptor! In today’s complex markets, choosing the right property management firm is one of the most important decisions a property owner can make. Not all professional property management firms are the same, therefore factors such as trust, confidentiality and accuracy should be considered when evaluating a firm to determine if they are the right fit to manage your property. Above all, a good firm should have a solid reputation for providing services, as well as for honesty and integrity. You are entrusting the selected entity with your asset and all that it requires, including acting on your behalf. The firm reflects you, and in turn, influences the perception others may have of you.  As the property owner, you want assurance that the firm you hire has your best interest at heart. A firm’s code of ethics not only applies to a property owner, but also to the tenants. Personal data of tenants will be accessible to the commercial property management firm you hire. Before considering a firm, ensure there is a policy in place as to how privacy of data is protected. Pennies matter when it comes to your business, so there is no margin for error. Inexperienced firms may exhibit rounding errors or mistakes when posting payments, which over time will add up and affect your bottom line. Financial integrity and stability play a key role in choosing the right firm. Experienced firms have internal controls established to ensure their accuracy in reporting and help safeguard your assets. Making the Right Decision While there are many strong property management firms, many have been started by principals with little management experience. When conducting due diligence, look for firms that exhibit experience in managing properties throughout different real estate cycles. A seasoned firm will provide financial stability to help guide you through good times and bad. Research internet reviews of the firms under consideration to establish they have a good standing in the community, as well as a good credit rating. A reputable firm will provide references, as well as conduct background checks on its property managers. Knowledge is power and, in this case, your best resource for making a decision on the best firm to represent your interests. Overall, the goal is to seek a firm that is capable of delivering a strategy to maximize the financial health of the property.

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Preparing for Inevitable Tech Changes to Commercial Real Estate Here in Southwest Florida

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Preparing for Inevitable Tech Changes to Commercial Real Estate Here in Southwest Florida By Gary Tasman CEO & Principal Broker, Cushman & Wakefield Commercial Property Southwest Florida, LLC Heraclitus of Ephesus once suggested that the only constant in life is change. For commercial real estate brokers, this change will occur whether they make it happen or not. However, if these same brokers would like a chance to remain top of mind and indispensable, they are best served capitalizing on any untapped assets available to them and adapting to the inevitable advancements of technology that are sweeping the commercial real estate domain and taking hold here in Southwest Florida. For example, Cushman & Wakefield is gaining much traction by posting market analytics, as well as published information regarding transactions and prospective sales, to a blog-like tab on the local chapter’s website and social media pages. Selling Yourself in Today’s Real Estate Market Targeted advertisements are already starting to appear right before consumers’ eyes, as social media platforms use personal information to deliver ads to those who want them the most. The next step will be personalized inperson ads, such as those found on LED video displays. When the time comes, brokers should know how and where to do this. The research begins now. Meanwhile, as listings continue to appear in print or online, great photography is vital to a consumer’s decision. High-resolution digital cameras, as well as drone technology, will increase image capabilities. Brokers may even consider flowing virtual reality into 3D software to alter how the consumer experiences commercial space. Those revolutionized listings can and should be sent before, during and after business hours, as Wi-Fi is continuing to take the real estate industry far beyond the physical office, a topic explored in a later section. Leveraging Technology is a Company-wide Effort Brokers can leverage their business with an invaluable network and meaningful sources of agent training and collaboration. This grants them access to a comprehensive dataset of real estate listings, transactions, agent recruitment opportunities and consumers. Those same consumers often separate brokers based on their brand, as well as the services and relationships those brokers establish. Therefore, Cushman & Wakefield has linked the national and regional projects that make up said brand to multiple platforms. This brand can be molded through technologies such as advanced analytics, cloud computing and 3D printing, as well as partnerships with existing startups. Right now, startups based on the sharing economy (renting or borrowing goods versus owning them) are disrupting the way firms apply commercial real estate. A sharing economy could generate revenues of $335 billion by 2025, eating up revenues and market share from the traditional real estate business. A partnership would allow for a new approach toward lease administration and space duration, as well as drive said company’s technological advancements forward through diversification of their core business focus without threatening the future of brokerages. This includes catering to the needs of an aging population and the increasing unpredictability of today’s consumers. Affectively Promoting Change But the question remains, how can brokers encourage their agents and clients to embrace these technological advancements? First, this network should be introduced to Apps that provide in-depth detail regarding finances, risks, property values and demographics, as well as how each of these items are critical to everyday investments. To better understand just how helpful and convenient these tools can be, brokers may want to provide both inperson and online support to staff members, depending on their needs. Also, playing up the convenience of this new technology offers one’s network a true reason to embrace it, especially as digital technology forces jobs of the future to be more flexible and connected despite the diverse age groups that fill those positions. Recently, Cushman & Wakefield tried their hand at webinars as a way of generating an interactive experience with clients and demonstrating to the in-house team that experimenting with innovative technologies can work in the firm’s favor. Going Beyond the Call of Duty With the technological shift of commercial real estate has come other types of movement that will force brokers to step outside of their job description. For example, keeping in mind the quality of infrastructure systems as they invest in urban development. Brokers should pay attention to strong telecommunications systems, such as high-speed internet, as well as strong roads and bridges and reliable and affordable energy. This includes observing the coordination between various planning teams, as well as becoming an advocate of sustainability, the circular economy, and smart solutions, especially as climate change comes even further into play. Within the last few months, Cushman & Wakefield has taken on two brokers with decades of experience in Southwest Florida real estate investments and real estate activities for regional shopping centers as a way of growing commercial property locally while considering how that property assimilates itself to various locations. Do Not Forget About Obsolete Space With the uncertain future of the real estate profession, brokers need to adopt skills far beyond what they learned in school. This includes creating one’s own job by thinking like a modern-day entrepreneur with the ability to socially interact and improve upon emotional intelligence. As hyper-connectivity and work flexibility increase, and therefore, leave a lasting impact on property prices, brokers must also consider how their traditional office space is currently being used. If brokers and agents are spending more time outside than inside, they may want to combine the spaces in which they live and work. For example, parking takes up 6,500 square miles of land throughout the U.S. Just think of how much more productive that space could be. Real estate firms and brokers themselves should look into virtual space as a way to improve the mobility of businesses and consumers, hence reducing the interdependence of physical and virtual spaces, advancing relationships, and staying ahead of the competition who may fight to integrate space when it is too late to remain a relevant company. This is a subject Cushman & Wakefield calls

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The Reinvention of Retail and how to Survive the Transition

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The reinvention of retail and how to survive the transition By Gary Tasman CEO & Principal Broker, Cushman & Wakefield Commercial Property Southwest Florida, LLC While the retail sector continues to weaken, retail giants Amazon and Walmart continue to strengthen their hold on the industry by buying, what seems like, everything in sight. The extremely competitive rivalry between the two continues to heat up with Amazon’s recent acquisition of Whole Foods. The acquisition takes aim at Walmart’s grocery business, as well as allows Amazon to establish a bigger brick-and-mortar presence. With Amazon capitalizing on Whole Foods’ large distribution and store network, other retailers will have to step up their game to survive and remain competitive. Amazon’s entry into brick-and-mortar stores along with their ability to successfully execute online sales, give them an advantage over the competition.  In recent years, top grocery chains have made major investments in online grocery services, but most are still lagging behind. Impact on Retail Industry Although this last battle involved the grocery business, the impact of the Whole Foods acquisition impacts more than supermarkets — it impacts all of retail. Recent acquisitions by Walmart including Bonobos, Jet.com and Shoebuy prove that retailers cannot solely survive through one direct channel. A multi-channel approach is the direction moving forward, and it involves a combination of both e-commerce and brick-and-mortar. As retailers transition to this omni-channel strategy, they have an enormous task to accomplish — provide customers with a seamless experience in both. Effects on Small Business With big box retailers leading the way and setting the pace, the smaller mom and pop type businesses will find it challenging to set themselves apart from the competition. Offering an online platform is necessary to survive, as well as compete, but the cost of entry is expensive. This shift will drive smaller businesses to consolidate in order to better align their strategies, refocus efforts and stay relevant. As this trend continues, the transition will see winners and losers take shape. As winners prevail, they must continue focusing on key indicators driving success including: Delivering a consistent brand promise online and in store Aligning internet strategies with brick-and-mortar strategies Delivering creativity and ingenuity to remain competitive Impact on Commercial Real Estate Market Within the retail market, we are seeing a shift in the footprint size of brick and mortar stores. Consumers are researching potential purchases online, prior to walking into the store. And with on-demand-type service (order in store, and it ships to your home or order online and pick up in store), physical locations are now becoming more of a showroom. Retail space is shifting to a smaller more local-style look and feel, eliminating the need for expansive amounts of warehouse space, thus dividing larger spaces into smaller segments to accommodate multiple business entities. With retail trends and the market shift, retail developers are not taking on new retail projects without significant pre-leasing commitments, as well as a significant entertainment/social component in that decision. Southwest Florida Outlook The retail sector of the Southwest Florida Market continues to report positive growth, with increased asking rates and decreased vacancy rates. A positive trend in absorption supports a rise in demand for retail space. Growth in the retail market is expected to continue, with an increase in population, as well as baby boomers and millennials looking for more retail options. Let us also not forget the desire to support local businesses. As this trend continues, a social component is necessary to remain competitive. Data shows that people are willing to travel to areas that provide the most enjoyment of the overall retail and entertaining experience. Fort Myers is a sought-out destination for retail and entertainment, while Cape Coral boasts numerous restaurants to satisfy any appetite. Southwest Florida’s strong pace of population growth fuels stronger demand for housing, health care, professional services and consumer spending. The influx of tourism and seasonal residents support the increasing demand for retail trade, housing and food service. This trend is evident in the decrease in vacancy and increase in overall absorption in the market. Regionalization of the Southwest Florida community is expected to grow faster than the national rate, as more businesses experience the need to serve all of Southwest Florida.

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A Regional Approach to Economic Development in Southwest Florida

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A regional approach to economic development in Southwest Florida By Gary Tasman While orthopedic surgical tool, devices and implants designer and manufacturer Arthrex got its start in Munich in 1981, its founder and president, Reinhold Schmieding, knew that to succeed in the long run, he would have to set up shop in America. His goal? To find a “resort environment” location, complete with beautiful beaches, culture, good weather, natural beauty, and shopping and dining. After searching Southwest Florida, he landed on Collier County, one of the most sought-after relocation destinations. Another global giant, information technology research and advisory firm Gartner, also scoured Southwest Florida and other states before landing on a location in Gateway in Fort Myers. While it started its operations here in 1998, it now has more than 1,000 employees, making it the company’s largest office location worldwide, exceeding even its headquarters in Stamford, Connecticut. Others who took that same cue include: • Connecticut-based The Camuto Group, formally based in Connecticut, bringing part of its footwear fashion business to Bonita Springs. • Pennsylvania-based Wawa Inc. brought several of their convenience stores and gasoline station destinations to Southwest Florida. • New Jersey transplant HERC Rentals also moved its headquarters to Bonita Springs. • And, of course, Fortune 500 company Hertz Corporation — the first major corporation to relocate to Lee County — moved into its new headquarters in Estero about three years ago. Regionalism Works in Southwest Florida Titans of industry like these and others are taking a classic regionalism approach to relocation, first taking a broad sweeping look of our area and what that means to their business, personnel and families as a region. Then, focusing in on a specific city or town in which to call home. It’s a concept that is working remarkably well for our communities, and bringing some pretty impressive players, jobs, economic impact, community philanthropy and more to Southwest Florida. Cushman & Wakefield Commercial Property Southwest Florida is seeing the impact big brands like these and others from afar are making locally as they look to secure their piece of paradise in the region. Among them: • Ameriprise Financial planners and advisors. • Konica Minolta, offering software, printers and other business solutions. • Iron Mountain, a global business offering services to store and protect business documents. Economic Development This regionalism view is a very important part of the economic development of any area, including Southwest Florida. That regional approach means Southwest Florida must continue to work on being a favorable destination, offering a diverse community appeal to continue our journey of economic development and pro-business atmosphere. There is no question that we compare very nicely, if not better, than many other regions based on a number of factors and characteristics that the regionalism approach to relocation entails. ’Best of’ Cities Southwest Florida has continually ranked high on a number of lists that measure anything from quality of life to healthy cultures to job growth. For example, Forbes recently ranked Naples No. 1 and Cape Coral No. 3 for future job growth anywhere in the United States. Forbes’ 2017 list of America’s fastest-growing cities also has the Cape Coral-Fort Myers metropolitan area the top spot. Furthermore, Moody’s Analytics expects the population of the Cape Coral-Fort Myers area to expand even faster than last year, and also projects that it will have the highest rates of employment growth and output growth this year, thanks to expanding hospitality and housing markets. Also, the Naples-Immokalee-Marco Island metro area was tops in contentment for the second consecutive year, according to the Gallup Healthways Well-Being Rankings that were made public in March 2017.  The survey says residents there feel safer than residents in any other community in the nation. Best-Performing Cities Index Another testament to the Cape Coral – Fort Myers Metropolitan Statistical Area is its No. 15 ranking in the Milken Institute’s Best-Performing Cities index of larger cities across America that came out in December 2016. The index uses metrics such as job creation, wage gains and technology developments to evaluate the relative growth of these geographical regions. MSAs on the list have cohesive strategies that allow them to distinguish themselves from others, and in fact may be a model for other regions to emulate for success. Lee County Lee County alone has 50-plus miles of great beaches, plus other natural beauty that of course plays a part in a business’s desire to locate its headquarters (or some other entity) in Southwest Florida. But there are so many other considerations. Among them, just to name a few to illustrate the point: • Available workforce — Lower unemployment rate. • Economics — Favorable perks such as no state tax. • Quality of life — Reasonable commuting times for the workforce; climate, including 260-plus days of sunshine; and a favorable cost of living versus other regions. • Shopping and dining. • The arts. • Professional sports — Lee County is home to Major League Baseball’s Boston Red Sox and Minnesota Twins. Charlotte County hosts the Tampa Rays. All three teams also host minor league teams. And Germain Arena is home to the Florida Everblades, offering premier Double-A hockey. • Technology connectivity. • Transportation — Southwest Florida International Airport serving 8 million-plus travelers annually offers nonstop service to major gateways throughout the U.S. as well as Canada and Germany. • Education — While the state’s 9th-largest district ranks 35th academically out of 67 districts in Florida, the Lee County School District Superintendent, Gregory Adkins, has reaffirmed the district’s goal of moving into the top five in the Sunshine State by 2020. • Major ports — Access is under 2.5 hours to the major ports north and east of us. From Individual Communities Come Regional Strength We have many individual cities, towns, villages and counties that operate independently and want the best for their location. But we must remember that their individual economies are collectively related to one another. There is common interest and characteristics such as those identified above that we all

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