The biggest turn-around story in the Southwest Florida commercial real estate market has to be the industrial market. Driving through the industrial parks off of Pine Ridge Road or Airport Road in Naples 3 or 4 years ago would have painted a pretty bleak picture. Seemingly half the buildings were vacant and available for lease or purchase, often with the sinister moniker “bank owned”. The same situation repeated itself in Bonita, Estero, and Ft. Myers, as most of the industrial parks depend on the construction industry.
The bursting housing bubble of the Great Recession dealt a death blow to a large percentage of construction trade which of course trickled down to all facets of Southwest Florida. During those dire times industrial buildings dropped in value to rock bottom prices, with many being dumped on the market at prices of $30-40 per square foot.
Fast forward to the present and those same buildings here in Naples have often doubled in value. In Naples 30 year old metal warehouses are now selling for at least $60 per square foot, while top quality buildings are now valued for $100-140+ per square foot. While there has been significant appreciation already, we may still be only halfway through this uptrend, with plenty more upside remaining. Justification for this continuing optimism can be seen in the market’s current supply and demand!
Industrial vacancy in Collier County has dropped to a very low 3.4% at the end of 2013. With virtually no new speculative warehouses and industrial buildings built in almost ten years and few on the immediate horizon the remaining inventory will only get tighter and tighter. As a result rental rates will follow course and go up. Unfortunately those users that were seeking properties a couple of years ago but failed to act, thinking the market would stay soft, lost out on an opportunity that may not reopen for many years. Compounding the shortage is the fact that there just isn’t a lot of industrial land remaining in urban Collier County.
The industrial markets in Bonita, Estero, and Lee County in general lag Collier County somewhat, but those markets are also on the move.
Like all cases of demand outpacing supply, rental rates will continue to go up and at some point in the foreseeable future it will again be feasible to starting the building and growth cycle all over again. And so the cycle goes.
Dougall McCorkle, MBA
Sales Associate and Commercial Specialist
Premier Commercial, Inc., Licensed Real Estate Brokers
Direct: 239.213.7234
Cell: 239.860.3368
dougall@premiermail.net