2014 proved to be a solid year in the world of commercial real estate in Southwest Florida, virtually on every front: land, retail, office, industrial, falling vacancies, increasing rental rates, little new supply, shrinking land availability.
2015 will be the explanation point from the year just past!
Hertz Global Headquarters construction is well underway in Estero. Photo is courtesy of Hertz.com
Office Market
Naples Class A office market is slowly chipping away the vacancies and will reach a full level of occupancy (95%) in 2016. Class B and C markets will lag somewhat as well as the Lee County markets. Rental rates are already within 10% of the last market top. 2015 will not see any significant increases in capacity, with the only new construction being end users (such as Hertz).
The Village on Venetian Bay is one of Naples’ premier specialty shopping centers. For leasing information please contact Dougall McCorkle at Dougall@premiermail.net
Retail
2015 will see the first new retail space deliveries in several years, albeit relatively subdued. Occupancy rates have rebounded into full capacity territory with rental rates hitting pre-recession levels. Retail typically leads office in economic recoveries, which has again been the case.
Class A Industrial building and warehouse sold off Enterprise Avenue for $3.375 million.
Industrial
2014 saw vacancies in SW Florida shrink to about 3%, which has made that segment one of the biggest turn-around stories of the past two or three years. There will be a limited new construction in 2015 so whatever vacancies that remain should be absorbed, of course at higher rental rates. Big users entering the marketing will find it increasingly difficult to locate space so new construction end-users will grow. This will cause many firms bound for Collier County locate in Lee County instead.
Dougall represented the seller in the investment sale of the SunTrust building for $17.5 million in Q3 2014
Investment Market
Needless to say, SW Florida and Naples in particular, has a certain cache that has fueled much investor demand. Demand certainly out-paced supply of income properties in 2014 and it will be even more heightened in 2015. Cap rates continue to drop as competition for properties continues to be fierce. Cap rates in Naples will generally be at least 100 basis points lower than other comparable sized markets.