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CHRISTOPHER SHUCART
President, JCS Realty Group, Naples
Christopher Shucart and his father, James, have been investing in Collier County commercial properties since 1997. In 2004, the pair formed JCS Realty Group, and today they specialize in buying smaller office and retail properties. JCS Realty's portfolio contains six retail projects containing roughly 150,000 square feet and two vacant parcels of commercially zoned land, all of which are in Naples and East Naples.
How do you view the current retail market in Naples and Collier County?
We feel the market is currently strong, in large part because there's not a lot of new product coming online, which tells me that occupancy rates will continue to increase and rental rates will continue to increase as well. Combined, construction costs, leasing costs, impact fees, the soft costs that go into building something, land costs — when you put them all together it equals a big number that you have to get rent-wise, so that's a barrier to entry for a lot of new development. It takes a lot of pre-leasing and some pretty high rents to get product built from the ground up.
JCS partnerships have invested about $16 million to acquire a pair of Naples properties in recent months. What was it about those particular properties that attracted you?
We purchased 550 Fifth Ave. S. this past summer. It's an 8,000-square-foot Coldwell Banker corporate location. They occupy the entire building.
The second building we purchased, more recently, was 837 Fifth Ave. S., and that's a 14,000-square-foot retail and office complex on two floors. The first floor is occupied by Chops restaurant, and the Engel & Volkers real estate firm occupies a portion of the building, as well. Culinary Concepts, which runs the restaurant, has its corporate headquarters in the building. The Coldwell Banker-occupied building was attractive to us because it came with a corporate guarantee from a good, credit tenant, and because the land size under the building was significant and there's an abundance of parking. In downtown Naples, especially, parking is at a premium. It's also on a corner lot, which gives it better visibility than some properties in that area. At 837 Fifth Ave., it's a fairly new building -- constructed in 1997 or 1998 -- and it was well constructed by a very reputable firm.
In addition, it also has two public surface parking lots behind it. Another intriguing element to us, with that building, is that if you were today to try to build a two-story building in that location, getting the numbers to work would be very difficult with all the costs associated with it. We're actually seeing less office space in the downtown Naples market, so longer term, we think having office space that we can rent at a lower rate than some of our competitors will be a significant asset.
What are your plans for the two recent additions to your portfolio in regards to renovations, improvements, etc.?
We're not going to be doing a whole lot to speak of at present or in the near term. We'll probably do some painting at both locations and some minor aesthetic improvements next summer, but both buildings are in really great condition and relatively new, so there's not a lot that's needed at this time.
Is JCS planning any additional transactions in the near future?
We've decided that over the next 12 months or so that we're not going to buy anything else, and instead we're planning to turn our focus inward to our existing portfolio and projects we already have in the works.
In 2016, for instance, we bought a property called Plaza Walk; it's a two-story building at Tamiami Trail and 26th Avenue North in Naples. It measures 31,000 square feet. There, we plan a major renovation of roughly $1.5 million. We intend to tear apart all the common areas and turn it into a Class A retail and office complex. We're shooting to complete that work by the end of 2017. We're also in the process of building a new building in downtown Naples, at 1200 Central Ave. It's going to be a small, but very high end, retail project. We're looking to complete that work by August of this year, and we've had a great deal of pre-leasing activity, so we're optimistic about that. But between the two projects, we're pretty full up.
What's your outlook for the Naples retail market for the next 18 to 24 months?
I think it's going to be strong for the next 18 to 24 months. Obviously we're heavily invested there, so we're banking on the continued strength of the market. One of the nice things about Naples is that it's a draw for a large geographic area around it. It pulls people in from well beyond the boundaries of the city or the surrounding geographic area. East Naples, for instance, has thousands of new homes coming online soon and most of those residents will patronize downtown Naples shops and restaurants and offices, because Naples is a destination for retail and entertainment for a large swath of population in the region.
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