Growth Bolsters Southwest Florida Commercial Real Estate

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Growth Bolsters Southwest Florida Commercial Real Estate

Posted on October 4, 2017
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By LandQwest Commercial

Southwest Florida is among the fastest-growing areas in the United States, with Forbes naming Cape Coral as the nation’s fastest-growing city.

Increasing population growth accelerates the need not just for residential space, but for the essential service to support them. All sectors of commercial real estate benefit from the influx of new residents.

 

 

 

 

 

INDUSTRIAL

Strong population growth, lack of industrial inventory and increasing rents drive the industrial market.

The Tri-County area (Collier, Lee and Charlotte Counties) reported 28 transactions in the second quarter, averaging $66.13 per square foot.

A closer look at Lee County provides deeper insight into the need for more industrial space.

Here the asking rent for industrial space is up 14% from one year ago, as is the average sale price. The vacancy rate is hovering near 2%.

Until supply can catch up with this increasing demand the industrial market will likely continue reporting low vacancy and increasing average prices in the near future.

 

 

 

RETAIL

Despite national news reporting that retail is struggling, greater Fort Myers demonstrates retail growth thanks to the needs of its increasing population.

Retail space leads the total dollar volume, with over $76 million in transactions year-to-date.

With over 40 acres and almost 300,000-square-feet of retail space sold in the second quarter, Southwest Florida can expect strong numbers in the retail market to continue.

 

 

 

 

OFFICE

Charlotte County leads the state in employment growth (reporting 12.5%), just ahead of Collier County’s 11.4%.

Employment growth impacts all commercial real estate categories, particularly office space. In the second quarter office space vacancy rates hovered around 10% in the region. Sustained growth has pushed the total dollar volume this year-to-date to over $43 million.

While companies may be looking for smaller spaces per employee, the average spent per square foot reached $170.76.

Certain submarkets are reporting vacancy absorption rates up to 20%, thanks to new employment opportunities moving into the area.

 

 

LAND

Commercial land sales are showing steady growth in average prices per acre. In the second quarter, 128.73 acres sold at an average of $323,100 per acre.

Local experts anticipate gradual growth in land pricing as we move forward into 2017.

The commercial real estate market benefits from rising demand in all categories, as evident in these recent second quarter numbers. Overall, sales of retail, office, industrial and land purchases over $500k are on an upward growth trend.

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