CRE market snapshot: Charlotte County attracts investor attention
Charlotte County in some commercial real estate circles has at times been considered a “no man’s land” between the more populous Sarasota and Lee counties.
But in recent years, buoyed by rising commercial prices, heightened competition in neighboring jurisdictions and residential developments like Babcock Ranch, Charlotte has begun to attract significant investor attention.
At the same time, the county has enjoyed declining vacancies throughout its office, industrial and retail portfolios, and rental rates have climbed steadily, according to CoStar Group data.
Analysts say as a result development will be imminent in the county — especially if interest rates continue to hover around historic lows.
Percentage of office space available in Charlotte County as of Dec. 31. By comparison, throughout Southwest Florida, a market defined as Charlotte, Lee and Collier counties, the office vacancy rate at the end of last year stood at 6.3% — though of the three counties, Charlotte’s office inventory is the smallest by more than six million square feet.
Number of office buildings under construction in Charlotte County at the close of 2017. The lone building, a 12,000-square-foot structure in the Placida Professional Center, is slated for delivery during the third quarter of this year.
Amount of square feet absorbed, or taken off the market, through leasing activity in 2017. Of that amount, one of the largest new office leases was executed by the Charlotte County Sheriff’s Office, for 3,747 square feet, in the Grand Oaks Plaza.
Average price per square foot for office space in Charlotte County. Though roughly comparable in price to neighboring Lee County, Charlotte has about one-fifth as much as much office space as does the county to its south. Office space in Collier County, by comparison, commands average rental rates of $20.72 per square foot.
Vacancy rate for industrial space in Charlotte County, a market with 4.46 million square feet and average rents of $9.50 per square foot — in the midrange of Lee and Collier counties. The three-county area’s industrial vacancy rate stood at 1.9% at the close of 2017.
Number of industrial buildings under construction at year end in Charlotte County, structures that totaled 54,400 square feet in all. Together, they were 87% pre-leased before construction commenced. By contrast, 11 buildings were being built in Lee and Collier counties during the same period, containing nearly 350,000 square feet of space.
Vacancy of Charlotte County retail space at the end of last year. The county’s 10.2 million-square-foot market, less than half that of Lee or Collier counties, has vacancy rates comparable to its neighbors. Overall, Southwest Florida’s retail vacancy was 4.3% at year end.
Amount of retail space, in square feet, removed from the market through leasing activity in Charlotte County in 2017. The net absorption, perhaps not surprisingly, was roughly one-third of that in Collier or Lee counties last year.
Square footage of the largest new retail lease in Charlotte County in 2017. The Ollie’s Bargain Outlet commitment to the Schoolhouse Square property also ranked among the Top Five leases in the three-county area last year, including renewals.
Number of retail properties under construction in Charlotte County at the end of 2017. The 3,500-square-foot building was leased before construction started. By comparison, 27 new buildings were under construction at year end in Collier and Lee counties, totaling 454,000 square feet.
Source: CoStar Group Inc.