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By Gary Tasman According to the National Oceanic and Atmospheric Administration (NOAA), we see 15 named storms, seven hurricanes and three major hurricanes in an average hurricane season from June 1 to November 30.  Regardless of the size and intensity of the storm, our team wants you to be fully prepared for small tropical storms and major hurricanes alike. Here are our 15 tips to ensure your commercial property has the best chance of mitigating the damage and safety hazards that can occur during and after major storms. Before a Hurricane Make sure your building was built to code and make any necessary updates as soon as possible. Many commercial and industrial buildings along the Gulf Coast were built to withhold hurricane-force winds. Read your lease and make sure you know exactly what you’re responsible for. If you have any questions, please visit cpswfl.com. Know about hurricane hazards and assessing risks. Check out this FEMA guide for more information. Make sure your flood and insurance policies are in place. If your property is in the hurricane’s path, it’s too late to get insurance coverage. It’s a good idea to take photos and videos of your building before the hurricane hits. This could come in handy later for insurance purposes. If your business is on the ground floor, make sure you place loose items up high or remove them from the building altogether in case of a flood. Remove furniture and items from outside common areas, decks and patios. Update emergency contact information and pay close attention to evacuation orders. Backup all computer files in the cloud and move computers to a secure, centrally located room. If they can’t be removed, place a garbage bag on top of them and secure it with duct tape. Place any paper files in this room as well. Since the window sills are usually lower, it’s best to place a towel along your store front to prevent wind-driven rain from entering your unit. Property owners should create or update their tenant phone number list as well as their tenant communication plan for emergencies. If you’re in a property with a generator, make sure the fuel is topped off, any automated circuits are tested in advance and that you have access to fuel on the backside of the storm. After a Hurricane If you notice that your building is flooded or damaged, it’s important that you DO NOT enter the building. There could be hot electrical lines, downed power lines that could be energized, unknown structural problems or the roof or the walls could cave-in. If you need assistance or have any questions, please don’t hesitate to contact us. Be aware that it could take some time to repair your building. Contractors will have a lot of work and may not be able to respond quickly. Acquiring materials for repairs will also be hard, if not impossible, to find. Check in with your tenants to assess any further issues or damage. Are You Sure You’re Insured? Making sure you have your insurance policy in order before a storm hits can make all the difference. Locate your insurance documents and keep them in a safe place. If anything needs to be updated, it’s best not to wait. What’s covered under your flood insurance policy can be complex so making sure you know exactly what’s covered is extremely important, especially because cancellations are becoming more common. This can vary depending on the insurance policies and providers chosen, where your business is located, the industry or type of business. Cushman & Wakefield | Commercial Property SWFL knows that hurricanes can be unpredictable. That’s why we have a dedicated property management division that will help you review your policies, and help set a detailed storm management plan in place to secure and repair your building. Our team will also assess the units and building to ensure they are safe to enter. Hurricane season is here. Make sure your building and tenants are prepared. For a free assessment of your property, reach out to the Commercial Property Experts at Cushman & Wakefield | Commercial Property Southwest Florida at 239-489-3600 or contact-us.

By Gary Tasman As we look back at downtown Fort Myers 40 years ago, there was little to no reason to head that way unless you had business to conduct during the day. Downtown turned into a ghost town after 5 p.m. on weeknights and on the weekends. But lawmakers and community leaders saw its potential and had a vision for change. Flash forward to today, and you’ll witness the renaissance taking place that is transforming downtown Fort Myers into a desirable destination to live, work and play seven days a week. In 2020, we identified key developments that would have the greatest impact on the growth of Downtown and Midtown Fort Myersincluding the Luminary Hotel and the return of conventions with the Caloosa Sound Convention Center. Now business and housing markets in the area are booming and there are a variety of new downtown Fort Myers businesses in the permitting process. Few cities in the region have it all in one place like Fort Myers does. Nestled alongside the picturesque Caloosahatchee River, downtown boasts boating, parks, walkable streets, rich history at your fingertips, local charm, independently owned boutique shops and restaurants, outdoor dining, and an array of arts and cultural events. City of Fort Myers Mayor Kevin Anderson said, “Over the last 20 years, the city has done a phenomenal job of bringing in more rooftops, and the focus is now on continued economic development.” Poised for More Growth Fort Myers and Lee County are poised for more growth than ever as people from across the country flock to our beautiful waterfront paradise. With the new Caloosa Sound Convention Center in full swing, we are seeing more national and international conventions coming back to Fort Myers and away from Bonita Springs, Sanibel and Captiva. Plus waterfront living, vibrant nightlife spots and a variety of entertainment options only add to the area’s intrigue. The Luminary Hotel has been hugely successful. The 243-room hotel features a rooftop bar, signature restaurant, modern diner, local coffee roastery and nearby waterside restaurant. Guests can spend time in the hotel or walk outside into the center of downtown Fort Myers to charming shops, restaurants and bars. The Luminary’s potential to bring more businesses to the Fort Myers River District paired with other downtown developments will make the area one to watch. The Caloosa Sound Amphitheater is now open and 2,500 people are able to watch concerts and other performances. Centennial Park will also soon be complete and that will help attract even more people to the area. Big-name shows at these venues will only equal more dollars being pumped into the downtown economy. Together these venues will help put downtown Fort Myers on the entertainment map at the perfect time, as more performers are beginning to tour the country. Planting the Seeds of the Future With these demand generators in place, 40 years from now the city could be unrecognizable. These developments will not only enhance the city and make it more appealing for property investors, but we will also see more businesses consider Fort Myers as their base of operations. If we continue on this path of growth, the area could become another unique world-class 18-hour-a-day live work and play environment alive with deep local culture and rich subtropical entertainment and atmosphere. “We’ve got to do it right, so it is attractive to businesses and people say that’s a community we want to do business in, we want to raise our families in and that’s a community we want to live and work in,” Mayor Anderson said. During the height of COVID, 850 to 1,100 people were moving to Florida each day. 23,000 people moved to Lee County alone from July 2020 to July 2021. Downtown Fort Myers and Lee County are blossoming and the seeds we plant now will help the area become the booming metropolis we know it can be. The Future of Downtown Fort Myers Focusing on the future and potential of downtown Fort Myers should be our priority. Ensuring that Fort Myers remains the vibrant, attractive city it is now depends on whether city leadership and developers do the right thing today. The city is looking at the possibility of taking Henry Street from the river down to the stadium and making it a pedestrian walk. There is also talk of smart parking and the technology that comes with self-driving cars. We will likely see the day when there will be more people than cars coming downtown. This means the city and businesses should look at how to better serve heavy pedestrian traffic and even consider the future of parking garages in the downtown space. Some big developments to keep in mind: Vantage – Proposed 16-story apartment building (225 units) and an accompanying 4-level parking deck. Seaboard Waterside Apartments – Two 6-story apartment buildings with a total of 420 units and amenities. Edsel Lofts – Residential development consisting of nine 3-story townhomes, each with a two-car garage and master suite terrace. AC Marriott – New 8-story, 132-room AC Marriott hotel with a ground floor bar and rooftop entertainment center. Gardners Park Grove – New residential development consisting of 10, two-story homes. Riverfront First Street Apartments – New 8-story multi-family development consisting of 221 residential units featuring a pool, riverwalk and associated amenities. McCollum Hall – Complete renovation of the historic McCollum Hall Building. Allure – Two new 32-story towers with 292 residential units and amenities. Staybridge Suites Hotel – New 6-story hotel with 100 guest rooms, pool, fitness area, and associated amenities. Prima Luce – Two 22-story towers with 220 residential units and amenities. Seaboard Self Storage – Self-storage facility consisting of three buildings with a combination of 60,000 sq ft. 2233 Grand Avenue Warehouse – New 3,892 square foot retail warehouse. First Street Apartments – Multifamily development consisting of 275 units, parking garage, 9,189 sq ft clubhouse, pool and related infrastructure. Hampton Inn – New 111-room Hampton Inn hotel on the corner of McGregor Bvd and Cleveland Ave.

By Gary Tasman A decade ago, it was hard to imagine the concept of a smart building or how it would transform the commercial real estate landscape. Today, smart building technology and flexible workspaces are one of the top priorities for commercial spaces. Some advantages of using a smart building for your commercial property include: Reduced costs related to maintenance and energy consumption Increased productivity Reduced amount of emissions Increased resale value What is a Smart Building? A smart building is any building that uses the Internet of Things (IoT) to automatically control things like heating, power, ventilation, air conditioning, security, lighting and other systems. This means the building can be managed from anywhere and at any time. Smart buildings give us more data than ever before, which allows decisions to be made with more clarity, better allocation of resources and increased savings in the long run. In time, all commercial buildings may become smart buildings. What is the Internet of Things? Smart technology is possible in part because of the IoT or everything connected to the internet. Think of objects and devices that “talk” to each other such as smartphones, computers, and watches. By combining these connected devices with automated systems, the building can gather information, analyze it and use it to make informed decisions from saving on energy costs to completing tasks for staff. An Office vs a Smart Building Smart buildings can give you an experience that general commercial buildings cannot.  The everyday building can’t collect data from user devices, systems, services and sensors the way a smart building can. This data not only makes the building programmable and customizable, but also more responsive to the needs of the building manager and employees. This technology is transforming how Facilities Managers approach asset management. With this data at their fingertips, they can ensure the comfort of its occupants, increase utilization and interact with staff at a higher level. Imagine an office building coming to life when you walk in! As developers nationwide face supply chain disruptions, rising interest rates and increased inflation, developers in the Southwest Florida market show little cause for concern. Population growth continues to climb and more companies are moving to the area, which also helps drive revenue. This gives developers a fantastic opportunity to capitalize on the smart building trend and create value with their property. Why Companies Should Invest in Smart Buildings One of the most enticing things about smart buildings is that when you compare them to conventional buildings, they perform much better. Although they cost more upfront, they bring in more rent in the long run. Smart building technology can cover more than heating and air conditioning and lighting systems. What makes this technology so appealing is that it can integrate into just about every system. For example, in retail, smart building technology can apply to things like security cameras and point-of-sale (POS) systems. Some local smart building examples include: Arthrex NeoGeonomics Franz EyeCare “It’s exciting to see businesses in our community shift into smart buildings and experience all of the benefits,” said CEO and Principal Broker, Gary Tasman. “As more businesses adopt this trend and more companies relocate to Southwest Florida, we could quickly see the commercial property landscape in our region shift toward this incredibly beneficial technology.” How Smart Buildings Make the Office More Efficient  It’s no secret that the office is forever changed in a post-pandemic world. When more people and businesses wish to move to a city like Fort Myers, city planners and commercial real estate developers must consider making the office environment more appealing than working from home. They have to figure out what the office environment now means for their company and what kind of employees they wish to attract. An economy that’s poised to keep on improving paired with strong office-using employment growth is making more companies seek out new types of office space. In fact, global Experience per Square Foot™ (XSF) data shows that employees with choice and control over where they work perform better. Employees are looking for companies that make the job and office an experience, not just a cubicle to go to every day. If you haven’t thought about moving back to the office or a hybrid work environment, it’s only a matter of time. For more information about smart building technology and commercial development opportunities around Southwest Florida, 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 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.

By Gary Tasman Our region has become one of the most popular in the nation for starting new businesses and relocating existing ones, thanks to high inbound migration numbers during the pandemic and a pro-business tax environment in Florida. Melanie Schmees, Director of Business and Economic Research for the Greater Naples Chamber of Commerce, states that the Collier County Economic Development Office website has seen a ten-fold increase in inquiries from businesses wanting to relocate to Collier County since the start of the pandemic. Certainly, the Naples area is seeing growth. Thanks to a strategic position midway between Florida’s two largest metropolitan areas, Collier County is seeing growth in transportation, warehousing and logistics in particular. As an example, construction is underway on a 937,000 square foot distribution facility for Uline, which when completed will bring more than 200 jobs to Collier County. But other companies seeking to build in the area are finding challenges. Industrial Supply versus Demand in Collier County Demand for commercial property – particularly industrial property – is far outpacing supply in the Naples area. Our Southwest Florida Industrial Marketbeat report for Q4 2021 indicated that out of more than 10 million square feet of industrial inventory in Collier County, less than 50,000 square feet were vacant. And while a number of properties are under construction, according to Schmees, those facilities are already 97% leased. Many believe that Collier County lacks developable land, which is a fallacy. The county actually has several areas that are identified for potential growth and development. However, much of the County’s available land is neither site-ready nor entitled for commercial/industrial use, translating into high costs and long lead times for anyone hoping to develop on these parcels. Schmees was our guest on the What’s Developing in Southwest Florida podcast recently, and acknowledged the entitlement and readiness issue: “These companies, they know where they want to be and they need to make the decision fast,” she said. “That’s something that Economic Development and the County Commission is recognizing, the need to really form relationships with developers and with landowners to have sites ready for when these projects want to come, instead of carrying it out through a multi-year process.” Areas for Potential Industrial Growth The inland region, east of I-75 and north of Alligator Alley, has been the most rapidly growing area in Collier County for more than a decade. Infrastructure improvements to Immokalee Road, as well as the extension of Golden Gate Parkway, have made eastern Collier County easier to reach. Census data shows that while Collier County’s overall population increased by 17% over the last decade, the zip codes east of I-75 experienced an estimated 26% increase in population growth during the same time period. The town of Ave Maria is certainly the posterchild for Collier County growth. Little more than agricultural fields just a decade ago, Ave Maria is now a bustling community with a population of more than 15,000. It will be joined by a number of neighboring communities in the County’s rural land stewardship area. The town of Big Cypress and its Villages: Rivergrass, Longwater and Bellmar will all soon be under development by Collier Enterprises. With thousands more residents moving to eastern Collier County over the next several years, the need for jobs—particularly in the industrial sector, will grow. The Economic Development Council of Collier County estimates the County will need an additional 3,685 acres of new business park lands by 2030. One of the most logical locations for that industrial growth is in Immokalee, where land is inexpensive, and a ready workforce is already in place. Central Immokalee is just 15 minutes from Ave Maria, and a mere 25 minutes from the future Big Cypress villages. “I think Immokalee is a prime area for investment opportunity as it relates to incentives and programs,” said Schmees. “Immokalee is a [Collier County] opportunity zone and a [USDA] promise zone. It has an FTZ for that foreign trade. Figuring out how to stack those and take advantage of those opportunities out there as a developer or investor, it’s a prime area to do that.” Part of the challenge is that while many recognize Immokalee’s potential, no business or developer wants to be the first to plant their flag. According to Schmees, investors and developers want a model or case study to follow—someone who has already made successful strides in the area. For decades, tourism and hospitality have been the major drivers of Southwest Florida’s economy—especially in the area’s coastal regions like Naples. However, our regional economy is becoming more diverse, a topic we’ve discussed here before. Diversification of our economy creates the opportunity to increase wage capacity in Southwest Florida while maintaining our excellent quality of life. For Collier County to reach its full potential, it needs to continue working with investors and developers to take a chance on the eastern part of the county, and particularly Immokalee. If you are a commercial property investor or developer looking to capitalize on eastern Collier County’s ongoing growth, contact the Commercial Property Experts at Cushman & Wakefield | Commercial Property Southwest Florida by calling 239-489-3600 or by contact-us. For more information about development in Collier County, listen to episode 3 of the What’s Developing in Southwest Florida podcast.

By Gary Tasman In early March, the Florida House passed a bill that is designed to help local governments and developers to create more affordable housing opportunities in the state. SB 962: Residential Development Projects for Affordable Housing has now passed both the Senate and the House with unanimous bipartisan support and appears to be on track for the Governor’s signature. The bill would allow local governments to approve residential and mixed-use developments on any parcel of land zoned for commercial or industrial use, as long as at least 10% of the project’s units are reserved for affordable housing. The bill is seen as a potential booster shot to cure the state’s deficiency of workforce housing. While this is an admirable step for the legislature, it should not be our only action to resolve the affordable housing crisis in our area. Affordable Housing in Florida For those seeking affordable housing options, Florida is one of the most challenging states in the nation. A 2021 report by the National Low Income Housing Coalition notes that while no state has an adequate supply of affordable housing for its population, the Sunshine State is in the nation’s bottom five. The state has a deficit of more than half a million affordable and available rental units for households earning 50% of the area’s median income. The affordable housing crisis is exacerbated by skyrocketing real estate prices over the last decade. Increases in the cost of housing have far outpaced wage growth in Florida. A 2021 study by QuoteWizard notes that while wages statewide had grown nearly 21% over ten years, median home prices have jumped 99.3% during that same period. Potential Solutions to the Affordable Housing Crisis There are three potential answers to the affordable housing problem, however only one is a truly realistic scenario. The possible solutions are to: Increase wages Decrease the cost of housing Increase housing supply Let’s take a look at each of these possible solutions. We’re certainly seeing progress statewide in income growth, although not at the level we would need to catch up to our current home prices and rental rates. We also expect to see some sort of correction in our housing market in the future, but it’s doubtful that home prices will fall significantly. Instead, we expect to see home and rental costs simply stabilize. While the two factors above could help alleviate a small amount of pressure, the biggest impact we can have on resolving our affordable housing woes would be to increase the amount of housing stock in our communities, and to do it more quickly than demand is growing. Increasing Housing Supply Through Density With the exception of our region’s coastal areas, Southwest Florida is a haven for single-family homes and gated communities. While that makes for a pleasant suburban feel, it also increases urban sprawl, making it more expensive to live here. Sprawl means that municipalities must pay more to deliver services like police, fire, ambulances, public transportation and sanitation services, which in turn raises our local taxes. Residents in sprawling areas endure longer average commutes and use more gasoline, further raising the cost of living. The most logical solution to ease the burden of urban sprawl is to increase density—or the number of housing units allowed per acre of land. By concentrating density in areas with adequate infrastructure, we can reduce the cost of providing municipal services, thus keeping our costs of living lower. Higher density also provides the opportunity for more housing diversity, like apartment units ranging from one-room studios to four-bedroom penthouses, as well as more condominiums, duplexes, and other multifamily options. Concentrated Development in Southwest Florida Here in Southwest Florida, we already see examples of municipalities that are strategically concentrating development. Fort Myers’ Midtown neighborhood represents one example. Infrastructure improvements will accompany the development of this area, which will include high-density housing all within walking distance of the desirable River District. Charlotte County employs a strategy called Transfer Development Units (TDU), which identifies appropriate locations for higher-density development, as well as areas where density should be reduced. The goal of the TDU program is to encourage the removal of outdated platted subdivisions and lots and support more sustainable higher-density mixed-use development. And in Collier County, the East Naples development plan hopes to spark more walkable neighborhoods and mixed-use communities with workforce housing opportunities. Just this week, three new apartment complexes broke ground, promising to bring more workforce housing and affordable units for seniors to East Naples. While Florida’s SB 962 should be celebrated as a victory for affordable housing advocates, local governments have tried to incentivize developers to hold back units for affordable housing for decades—with minimal success. Instead of encouraging builders to create more affordable units, they often discourage developers from pursuing projects at all. However, government incentives, paired with smart growth and higher density developments, may offer the key to solving our local affordable housing troubles. Are you a developer seeking opportunities in Southwest Florida? The Commercial Property Experts at Cushman & Wakefield | Commercial Property Southwest Florida have the knowledge and experience to help guide you. Call our team at 239-489-3600 or contact-us.

By Gary Tasman 2021 was an explosive year for commercial development in Southwest Florida. Thanks to what we’re calling the “COVID Economy,” our region experienced a population boom, which in turn created more demand for commercial and residential property than anyone anticipated. Southwest Florida saw an explosion of housing starts and rental communities, as well as rent growth last year. What do we mean by the COVID Economy? Economically speaking, the pandemic created opportunity for growth in Southwest Florida. Tourists with pent-up travel demand were drawn to the Sunshine State because of limited restrictions and business closures. At the same time, employees nationwide were coming to the realization that they could potentially work from anywhere, and Southwest Florida’s quality of life has certainly attracted remote workers. These factors, in combination with low interest rates and other federal economic initiatives, sparked an exponential population surge—on top of our region’s already above-average growth. Growth, Supply, and Demand As we’ve discussed in previous articles, commercial development closely follows population growth. New residents need services like health care, restaurants, grocery stores, and entertainment venues. As these new facilities are built, jobs are created, and even more people move to the region to fill those positions. As high demand meets a dwindling supply, where do we go from here? Our region’s current inventory of office, industrial, retail, and even multi-family homes are nearly depleted, creating demand for even more development. However, the growth of our region is environmentally constrained by the Gulf of Mexico to the west and environmentally-sensitive lands to the east and south. Our predictions for the commercial property market in 2022: As demand for land increases disproportionately to supply, we expect to see a near record-breaking year for land sales. Because much of our investment property is absorbed, we will see a decrease in the number of investment sales. However, the average value of 2022 investment sales will be considerably higher. Development deals will be both more scarce and more expensive, meaning developers will likely team up to get projects off the ground efficiently. Speculative building will increase. Although our region’s commercial development has been rapid, it has lagged behind the population explosion. Developers have a great opportunity to create value through spec building, as the projected returns on the risk outweigh the low returns on cap rate deals. The economy will slow down by the end of 2022. The recent increase in housing values isn’t sustainable long-term, and combined with anticipated interest rate increases, prices will flatten and sales will slow. Want more of Gary Tasman’s predictions for 2022 and his advice for your commercial property strategy? Listen to Episode 1 of our new podcast, “What’s Developing in Southwest Florida?” If you’re a commercial property owner, buyer, user, or investor, the market still provides opportunity for you—but it is moving quickly. 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 239-489-36000 or contact-us.

By Gary Tasman The ink is now dry on the $1.2 trillion federal Infrastructure Investment and Jobs Act (IIJA). The bipartisan bill represents the most momentous investment in U.S. infrastructure in more than 50 years, not only reauthorizing $650 billion in already appropriated funding, but also designating an additional $550 billion for new infrastructure projects. These include improvements to transportation infrastructure such as highways, bridges, public transit, ports and airports. The increased funding also supports efforts to shore up the nation’s electric grid, broadband, and water infrastructure. Infrastructure reform is good news for business and the economy as a whole. The ability to transport goods and services—as well as employees—from one location to another is a key component of business efficiency. Improvements to infrastructure not only bolster productivity and reduce production costs, they also create jobs, both short-term and long-term. Infrastructure investment also has a significant impact on commercial real estate. Here in Southwest Florida, the path to commercial and residential development typically follows infrastructure investments. As our region has matured and expanded, the trick to finding the next hot market has been to follow the municipal planning process, in particular transportation and utility improvements. Infrastructure and Growth in Southwest Florida Examples can be seen across Southwest Florida. In just two decades, Collier Boulevard in Naples has developed from a rural two-lane road to a bustling six-lane divided highway. With the improvements to transportation infrastructure and accompanying utilities expansion, Collier Boulevard is now a bustling commercial and residential corridor with gated communities, large shopping centers, and a 100-bed acute care hospital—and the area is still growing. In Lee County, we’ve seen similar growth just east of Interstate 75. Only a little more than a decade ago, Southwest Florida International Airport and Florida Gulf Coast University were outliers, with little other development along Treeline Avenue and Ben Hill Griffin Parkway. Today, tourists flying into RSW or alumni returning to FGCU for a visit after a long absence may not even recognize the area. Further north, we can expect to see similar infrastructure-fueled growth along Burnt Store Road between Cape Coral and Punta Gorda, where utilities expansion and road-widening projects will foster more residential and commercial growth. Additionally, investments to the Punta Gorda Airport are sparking similar progress in Charlotte County. The Big Picture: Infrastructure and Commercial Real Estate Although the final destination of the IIJA funds has yet to be determined, we can expect heavily-populated states like Florida, California, Texas and New York to receive the greatest amount of funding from the IIJA. According to Rebecca Rockey, Cushman & Wakefield Head of Economic Analysis & Forecasting, the most obvious CRE beneficiary of infrastructure improvement is industrial real estate, because “…nearly all goods that U.S. consumers purchase weave their way through a domestic maze of transportation and warehousing.” However, Rockey points out that the true impact oncommercial property is through the indirect effects of infrastructure investment on the economy, output, and productivity. The ROI of infrastructure investment can be impressive. Over ten years, each million-dollar increase in public infrastructure investment is expected to yield nearly $700,000 of additional Gross Domestic Product. Moody’s Analytics estimates that the GDP could grow by 3.5%, or $758 billion of output, over the next 10 years. As a result, Cushman & Wakefield analysts expect to see total demand for all commercial real estate sectors (office, industrial, retail, and multi-family residential) to climb by about 1.2% across the nation. In an already hot commercial property market like Southwest Florida, this number could be even higher. How will the IIJA influence your commercial property investment strategy? The Commercial Property Experts at Cushman & Wakefield | Commercial Property Southwest Florida have the knowledge and experience to help guide your decision-making process. Call our team at 239-489-3600 or contact-us.

By Gary Tasman We closed 2021 with a discussion on inflation and interest rates, and how we anticipate these factors will influence leasing and development in our market. As we enter the new year with the expectation of slowing economic growth and continued high inflation, we want to take a closer look at how the current economy will influence our working habits—and how commercial property trends will change as a result. Inflation and Spending As we know from our own personal finances, people tend to change their spending habits when inflation drives prices higher. We may buy fewer name-brand products, eat out less frequently, and cut back on luxuries like vacations. To manage our expenses long-term, homeowners may even choose to downsize to a smaller house. Businesses are no different. Inflation forces businesses to also make more prudent buying decisions, spend less opulently, and manage costs aggressively.  For businesses, however, there is an additional complicating factor. Inflation and the resulting increase in the cost of living often necessitates higher pay for workers. For businesses attempting to manage costs, this presents a significant challenge in any inflationary year.  Further confounding the matter in 2022 is our tight labor market, in which competitive pay will be vital to attracting new employees and retaining existing ones. How Workplaces Will Navigate Inflation With pay cuts presumably off the table, how will employers contain costs while remaining competitive in the marketplace? One of the most obvious cost-cutting measures is to reduce operating costs like rent and utilities. This can be done in one of two ways: either by moving to a less costly facility or by reducing the need for office space altogether. Business owners leasing high-rent modern office spaces may need to evaluate whether a “Class A” image is vital to their operations. An office in a Class A building gives clients a lasting impression and provides top-notch amenities to employees. However, the operating costs can be prohibitive for businesses that don’t rely on prestige as a differentiator. Businesses will need to determine the importance of their image when evaluating costs. The second potential method of reducing rent and utilities is to transition to a remote or hybrid workforce—a work structure many of us are already familiar with. Gallup notes that as recently as September 2021, 45% of full-time employees in the U.S. were working at least partly remotely, and more than two thirds of white-collar workers were working from home at least part-time. Remote and hybrid work can save companies an average of $11,000 per employee over the course of a year, according to Global Workplace Analytics, and the majority of this savings is related to real estate. While it’s unlikely that most employers will switch to a fully-remote workforce, the need for cost management will compel many businesses to switch to a hybrid model to reduce operating costs until the inflation rate stabilizes. How are you and your business planning to manage through inflation? If your strategy involves changes to your workplace or other facilities, our team of commercial property experts at Cushman & Wakefield | Commercial Property Southwest Florida can help you navigate the options available to you. Contact us by calling 239-489-3600 or contact-us.