What’s Next, Ep. 30: Pitfalls of a Hot Market

By Gary Tasman If “season” in Southwest Florida felt a little different to you this year, it’s probably no surprise. We’ve all grown accustomed to seasonal population fluctuations, but the variance between our busy winters and lazy summers is decreasing rapidly—and this new year-round tourism trend will have a significant impact on our local economy and business climate. Just 15 years ago, it was not uncommon for restaurants to close for several weeks during the summer, especially in tourist havens like Fort Myers Beach, Sanibel, or Marco Island. Many small businesses took advantage of a major dip in tourism from mid-May through mid-October. Today, taking two months off during the “slow months” seems nearly unthinkable for a local business. A glance at passenger traffic through Southwest Florida International Airport explains this phenomenon. In 1984, the first full year RSW was open, the airport saw 194,287 passengers in March, its busiest month. By contrast, August 1984 only saw 75,638 passengers travel through RSW, 61.1% fewer passengers. In 2021, seasonal fluctuations still exist, but not at the extreme level we’ve seen in past years. 1,162,342 passengers traveled through RSW this March, an astounding number considering the impact of the coronavirus pandemic. In August of this year, 647,534 travelers passed through the airport, a drop of just 44.3% from the airport’s busiest month. Why the shift? Certainly, the pandemic had some impact on travelers. Pent-up demand after months of coronavirus isolation had consumers itching for travel, and Florida’s open business climate and scarcity of coronavirus restrictions made the state an ideal tourist destination in 2021. Tourists could travel to Florida without fear of beaches, parks, golf courses, and restaurants being closed due to coronavirus controls. While the pandemic may have accelerated this trend, we expect it to continue. Since those early days of travel through RSW, our economy has diversified. Today, people visit Southwest Florida in the summer and discover that even with our sweltering afternoons and evening thunderstorms, this region has much to offer: a nurturing environment for business and employment, outstanding schools, and top-of-the-line healthcare. We’ve all seen the impact of this realization in the number of homes being sold and built in Southwest Florida, and seasonal homes are a large part of that equation. Nationwide, the U.S. saw a huge jump in the number of vacation homes sold in early 2021, and as of 2019, Lee and Collier are the country’s #1 and #3 counties for vacation homes. And as more people realize that they can be effective while working remotely, our population boom—both seasonal and permanent—will continue. With population growth comes opportunity, a concept we’ve discussed here before. Homes need to be built, fueling the construction industry. New residents need services like physicians, auto repair shops, air conditioning technicians, and landscapers. They also need grocery stores, restaurants, entertainment, and recreation centers. The need for these businesses and services drives even more growth, and the cycle continues with commercial real estate in high demand to fulfill the needs of our growing population. As long as Southwest Florida can continue offering everything that makes it special— year- round recreation, outstanding healthcare and educational opportunities, and growing employment opportunities–– we anticipate the exponential growth of our region to continue its upward trajectory. To learn how you can take advantage of the demand created by our current market, contact the commercial property experts at Cushman & Wakefield | Commercial Property Southwest Florida. Whether it’s time for you to sell, or you’re just considering your options in our current commercial real estate market, the commercial property experts at Cushman & Wakefield | Commercial Property Southwest Florida have the knowledge, data, and resources to determine the best strategy for you. Contact us by calling 239-489-3600 or contact-us.

By Gary Tasman The scaffolding has been removed from the new air traffic control tower at Southwest Florida International Airport (RSW), serving as a visual reminder of the rapid growth and transformation of our region. The travel and tourism industry has long been Southwest Florida’s major economic driver. While travel trends are still slow in other parts of the country, travel to our area has never been more popular—and its impact on our commercial property market is substantial. According to the Lee County Port Authority, more than 814,000 passengers traveled through RSW in July—an increase of 42% over July 2019 and a jump of 218% over last year. To accommodate our region’s popularity as a travel destination, the airport itself is expanding. In addition to the new control tower, plans are underway for a four-story terminal building expansion and other support structures. And just this week, RSW hosted a job fair for more than 200 positions at multiple companies located within the airport. Modifications to the airport itself are only a small part of the changing landscape around RSW, however. Construction crews have become a common site in the airport vicinity over recent years, in particular along Three Oaks Parkway near Alico Road. Commuters on I-75 have watched a series of new buildings rise on the horizon just west of the interstate, including the new NeoGenomics world headquarters, Scottlynn USA’s North American headquarters, and a new corporate office and surgery center for Frantz EyeCare. The Alico Road corridor between I-75 and US-41 has a staggering number of commercial building projects currently in planning, permitting, and construction. Many of these are large commercial developments like Three Oaks Marketplace, a 400,000 square foot commercial/industrial mixed use planned development on Alico Road. An assortment of other industrial and commercial parks and distribution and logistics centers are planned for this area, including a planned 278,000 square foot Amazon last-mile distribution center with 78 loading docks. Along Daniels Parkway and the north side of Southwest Florida International Airport is the new Skyplex, a 1,150 acre development area that is becoming home to office buildings, industrial warehouses, corporate headquarters, retail, restaurants, and aviation-related industries. With close proximity to workers from Fort Myers, Gateway and Lehigh Acres, it’s no surprise that large local employers like Gartner Inc. and Alta Resources have pounced on Skyplex as a location for their new facilities. Other parcels near the airport display a diverse array of future purposes. A Porsche dealership has joined its neighbors Audi of Fort Myers and Rockstar Harley Davidson near I-75 and Daniels Parkway. Best Home Services plans a 62,000 square foot headquarters off of Three Oaks Parkway. South of the Airport, the proposed Florida Gulf Coast Technology and Research Park will boast nearly 5 million square feet of retail, commercial, and industrial space. More planned residential units are coming as well, including Esplanade Lake Club and Wildblue off Alico Road as well as Timber Creek near Daniels Parkway. Perhaps the most surprising thing about the development near RSW is the relative dearth of hotel properties near the airport. Most major airports are surrounded by hotels, perfect for weary business travelers. With large businesses now setting up camp near RSW, our region will need more inland hotels with proximity to the airport and major employers. We’ve already begun to see a small shift in this direction. This summer, Home2 Suites by Hilton opened a 123-suite hotel near Terminal Access Road and Ben Hill Griffin Parkway. Further to the south, the Florida Gulf Coast Technology and Research Park proposes to develop up to 240 hotel/motel units, and on the other side of the interstate, the Avid Hotel plans to provide130 rooms at the Three Oaks Marketplace. On the heels of all this development, we should anticipate a future hotel and conference center near the airport, which would cement Southwest Florida’s transformation from tourist destination to commercial hub. Currently, the region’s convention business is limited to beachside resorts and downtown conference centers. With plentiful retail and restaurants at nearby Gulf Coast Town Center and Miromar Outlets, a full-size conference hotel near the airport is a likely prospect for the future. 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. Whether it’s time for you to sell, buy, or you’re just considering your options in our current market, the commercial property experts at CPSWFL are able to assist you with determining your best strategy for the future. Contact us by calling 239-489-3600 or contact-us.