Rational commercial growth in Southwest Florida

By Shawn Stoneburner More than 100 years ago, our area’s most famous seasonal resident, Thomas Edison, famously said “There is only one Fort Myers, and 90 million people are going to find it out.” Ever since, Southwest Florida has struggled with its own success; we perpetually play catch-up to build infrastructure required to provide jobs and services for the residents who continue to move here in droves. Commercial development in the 1970s and 1980s focused on our coastal areas and US-41, catering primarily to sun-seekers and retirees. In the 1990s and 2000s, commercial development boomed in South Lee and North Collier Counties, thanks to plentiful available land and relatively low costs. Yet our largest population centers, Cape Coral and Lehigh Acres, are nowhere near the bulk of our region’s jobs. As a result of this irrational pattern of growth, the average one-way commute time in Lee County is now 42 minutes, according to Lee County Economic Development. That’s significantly higher than the commute times in many similar-sized metropolitan areas around the country. Ready to make a move?  Get started by contacting us. Fortunately, there’s good news for those of us stuck in traffic every morning. Employers are beginning to realize that it makes good financial sense to move their businesses closer to their workers. A 2018 study by global staffing firm Robert Half discovered that nearly one-quarter of American workers have left a job because of a bad commute. That translates to tens of thousands of dollars in hiring and training expenses and lost productivity per year even for small businesses, and millions of dollars annually for large employers. As a result, we’re seeing a rationalization of our marketplace across Southwest Florida. In Lee County, jobs are migrating closer to the center of the county, with the I-75, Alico Road, and Daniels Parkway corridors leading the way. This central region of Lee County, with close proximity to Southwest Florida International Airport (RSW), is seeing exponential growth from both existing businesses and newcomers to our area. Commercial property in this area is booming. Land in close proximity to RSW already houses some of Southwest Florida’s largest employers, including Florida Gulf Coast University and Gartner. Massive new facilities for Scottlynn USA, NeoGenomics, and Alta Resources are moving into the neighborhood, and companies from across the nation are poised to follow. Central Lee County is on the short list for substantial new manufacturing, research and development, office, call center and distribution facilities. The anticipated result is 45,000 new jobs coming to Southwest Florida in the next five years and another growth spurt for our region. But unlike past growth spurts, today’s more rational market will be prepared for it. The new air traffic control tower and runway at RSW will help the airport accommodate more commercial traffic for these businesses, and new transportation corridors like the Daniels and Alico Road extensions are already improving commutes, particularly for Lehigh Acres residents. “The goal is not to grow just for the sake of growing. We want to achieve targeted growth that improves the quality of life for our residents,” says John Talmage, Director of Lee County Economic Development. “For example, right now the cost of commuting and maintaining a vehicle make up close to 25 percent of household expenses for people in Lehigh. But as jobs move north, those expenses decrease dramatically. Car costs will be closer to 10 percent of household expenses. That’s a considerable upgrade in quality of life.” Demand for property in central Lee County is high, and commercial property investors know that our supply of developable land is low because of the environmental sensitivity of our region. For owners of property near RSW, Daniels Parkway, or Alico Road, your acreage has never been more desirable for development. Our new, more rational marketplace has created an ideal time to consult with a broker and take advantage of Southwest Florida’s next growth spurt. The professionals at Cushman & Wakefield Commercial Property Southwest Florida are an excellent resource as you consider your options. Cushman & Wakefield’s brokers have extensive local market knowledge and best-in-class data and analytics to guide your decision-making. Contact us for a complimentary, no-obligation property valuation by calling 239-829-5400 or contact-us.

By Shawn Stoneburner With election day now behind us, it’s important to understand how the election results may impact commercial property. A predictable pattern has emerged in the commercial real estate market. As with every election year, we’re facing a high degree of uncertainty about what lies ahead, and that uncertainty typically sparks a “wait and see” attitude among investors because of a fear of the unknown. Research shows us that there’s really no reason to let fear drive us to wait and see what happens. Whether the occupant of the White House wears a red or blue necktie actually has little traditional impact on the commercial property market. History shows us that even a dramatic shift in the presidency or congress doesn’t necessarily mean disorder or turmoil are on the horizon. “Commercial property has performed well under both parties,” says Kenneth McCarthy, Principal Economist with Cushman & Wakefield. “Since 1979… property index returns have averaged better than 8.5% annually under various democratic and republican administrations.” Ready to make a move?  Get started by contacting us. Obviously, the results of the election matter to each of us individually, but there are more significant factors for commercial property buyers and sellers to consider when evaluating their options. The market cycle, interest rates, employment levels, geopolitical events, Gross Domestic Product (GDP) and consumer spending, as well as the pandemic, can all impact commercial real estate pricing levels and transactions. And while the political makeup of Washington, D.C. can influence each of these factors, the sheer number of variables in play prevents drastic change in the market even when there’s drastic change inside the Beltway. For example, a democratic administration could raise corporate taxes and reduce overall earnings. But that same administration might modify trade relations with our foreign partners and improve our nation’s GDP. Conversely, a republican administration may improve corporate bottom lines by lowering taxes on businesses. At the same time, those tax cuts could reduce available federal funding for the infrastructure needed to support growth. There are simply too many variables at work to make a significant short-term impact. Regardless of these facts, we will still face a period of election-related uncertainty in the real estate investment market. In 2020, this “wait and see” period could be longer than usual, with some Senate races still undecided and results of the presidential election are challenged in a number of lawsuits. It would be a mistake to look at this uncertain period as a negative and let fear keep us from moving forward. In many ways, this is actually a period of opportunity. The hesitation builds pent-up demand for commercial property, and at the same time means there’s less competition while other sellers wait to see how the situation will shake out. This supply constraint, paired with repressed demand, drives quicker sales and higher prices. If you’re considering selling a commercial property, this is a great time to consult with a broker about how to take advantage of the current market. With interest rates still at historic lows and the Southwest Florida population continuing to climb, buyers are ready to jump into the market. The sooner your property is on the market, the better positioned it will be to sell. The professionals at Cushman & Wakefield Commercial Property Southwest Florida are an excellent resource as you consider your options. Cushman & Wakefield’s brokers have extensive local market knowledge and best-in-class data and analytics to guide your decision-making. Contact us for a complimentary, no-obligation property valuation by calling 239-829-5400 or contact-us.

By Gary Tasman Black Friday and the year-end shopping season are right around the corner, and 2020 promises to bring changes to the way we shop for our holiday gifts. Retail had already been undergoing a transformation before the COVID-19 crisis reached our shores, and the pandemic will bring both short and long-term implications to the way we shop. Successful businesses will be those who find a way to reimagine the retail experience, and property owners need to understand how these implications affect them. For decades, shopping malls were the primary destination for holiday shoppers, thanks to big-box stores and appearances by Santa Claus. But as consumer preferences and habits have changed, the mall experience has begun to erode. COVID-19 will likely accelerate this attrition, as Americans continue to avoid crowds and indoor gatherings. Deloitte’s 2020 holiday retail survey found that more than 50% of holiday shoppers feel anxious about shopping in stores this year. It would be a mistake, however, to consider brick-and-mortar retail a thing of the past. While the current state will certainly reinforce the popularity of e-commerce, brick-and-mortar retail still has a path to success. For years, successful retailers have adapted to consumer preferences by providing customers with an experience rather than just a mundane shopping trip. From in-store play centers, to celebrity appearances, to hands-on and virtual reality demonstrations, brick-and-mortar retail is evolving into “retailtainment,” sometimes called experiential retail. Ready to make a move ? Get started by contacting us. Personal shoppers, group cooking demonstrations, and custom fittings might seem tone-deaf in the midst of a pandemic, but savvy business owners are already looking ahead to our post-COVID future. Some experiences simply can’t be provided online, and retailers who are prepared to shift their business models to a more experiential paradigm are more likely to weather the storm. After a record year for retail property sales in 2019, retail real estate sales volume has lagged since March. In fact, sales volume in Q2 and Q3 2020 has been lower than we’ve seen in three years. But retail property owners shouldn’t lose hope. While empty retail spaces may be more plentiful now, Cushman & Wakefield’s Chief Economist, Kevin Thorpe, expects retail, and especially experiential concepts, to storm back after COVID-19. “People are pining to go out and shop, eat and be entertained,” explains Thorpe. “Pent-up demand will be unleashed.” It’s not just existing retailers who are buying in to the retailtainment trend. New businesses are already poised to take advantage of this pent-up demand. Consider the early success of Popstroke in Fort Myers, which opened recently to crowds and fanfare despite the pandemic. Popular pre-COVID concepts like painting studios, rage rooms and ax-throwing bars will see a likely resurgence in our post-pandemic future. Even the much-maligned shopping malls are getting in on the action. Forty years ago, malls promoted trendy features like skating rinks and waterparks to draw consumers away from downtown shopping districts. Today, malls like the Edison Mall in Fort Myers are turning to similar tactics, looking towards adaptive reuse to fill vacant space and provide entertainment. Edison Mall will soon be the home of the Southwest Florida Military Museum, a departure from the mall’s traditional retail model. New malls are also providing retailtainment venues. Miami’s planned American Dream mall is expected to host an indoor ski slope, a Ferris wheel, an amusement park, and more. It’s understandable for retail property owners to be frustrated in our current market, but with the proper data and positioning of these properties, retail spaces still hold value. The professionals at Cushman & Wakefield have the research, insights, creativity, and vision to help find the best use for your property and connect you with the buyers who are ready to bring their vision to life. There is no doubt that shoppers will eventually head back to stores for items other than essentials, although with COVID cases spiking across the nation, that shift may not occur in time for this year’s holiday shopping season. “The issue with this recession has not been one of demand, it’s been supply led,” said Cushman & Wakefield Global Futurist Andrew Phipps. “We haven’t had the chance to spend the money we’d like to, as opposed to not having the money to spend.” Even though the 2020 holiday shopping season will continue to see challenges for the brick and mortar retail industry, it’s not time to sound the death knell for retail. Instead, as we inch closer to our post-pandemic future, expect to see the retail market evolve in new and exciting ways. The retailers that will survive will be the ones who anticipate – and invest in — this evolution.