Lee County market has tempered somewhat in 2019 after a series of superlatives
Fort Myers represents the largest and most dynamic commercial real estate submarket in Southwest Florida, and one of the fastest growing areas in Florida and the U.S. Though traditionally a resort community with a heavy tourist influence, the Lee County city and its surroundings have blossomed into a vibrant residential community with significant retail, industrial and office space.
Each sector has hit relative highs as a result of growth this cycle, according to CoStar Group data.
Retail vacancy, for instance, ticked down to an all-time low in 2017, and last year marked the largest volume ever for retail investment sales. On the industrial side, the submarket is experiencing the first speculative development since the last decade’s economic recession, as population increases have prompted a need for additional e-commerce-inspired logistics and service-oriented space.
Office space, too, has gained ground, with cap rates falling to the upper 7% range. Development in this sector has occurred as well, with build-to-suit projects for Hertz, Gartner Inc. and others. Medical office space has also been a big driver in the market; CoStar estimates that 30% of all office development in Fort Myers is linked to medical uses.
In each of the three sectors, as well, where investment sales or development has occurred, it has been with strong pre-leasing activity and low vacancies as compared to the balance of the market.
Amount of retail space, in square feet, delivered in the Fort Myers submarket in the past 12 months. Perhaps surprisingly, the figure is below the historic annual average of 774,010 square feet.
Quoted rental rate on a per square foot basis for all retail space in the Fort Myers submarket as of June 1. By comparison, Estero has the highest retail asking rents of any area in Lee County, at $21.39 per square foot.
Amount of vacant retail space, on a percentage basis, in Fort Myers. Historically, the rate stands slightly higher, at 6.4%. By comparison, Estero’s vacancy rate tops 10%.
Amount of retail space absorbed, or removed from the market through leasing activity, over the past 12 months in Fort Myers. Historically, the 12-month average positive net absorption has been around 630,400 square feet throughout this cycle.
Amount, in U.S. dollars, of investment sales of retail properties over the past 12 months in Fort Myers. The average 12-month volume the past several years has been $215.6 million, by comparison.
Amount as a percentage that retail rents are expected to grow in Fort Myers through the end of 2020.
Number of retail properties under construction in Fort Myers presently. Combined, the properties contain 113,600 square feet and were 94.5% pre-leased prior to construction.
Average price per square foot for retail investment sales over the past 12 months. The lowest sale took place at $46 per square foot; the highest at $3,232 per square foot.
Vacancy rate for all industrial space in Fort Myers, less than half the historic average of 8.2%.
Amount of industrial logistics space, as measured in square feet, now under construction in Fort Myers and the surrounding area. This space is in addition to the 684,000 square feet delivered in the submarket over the previous 12 months.
Average rental rate, on a per square foot basis, for Fort Myers industrial space. The figure reflects a 4.6% rise in asking rents over the previous 12-month period.
Average cap rate for industrial sales over the past 12 months, spread over 169 transactions at a price per square foot of $78.
Average vacancy rate of Fort Myers’ office space. The rate is down from a historic average of 11.4%.
Amount of absorption of office space over the past 12 months, basically on par with historic averages. The figure comes amid new office deliveries totaling 247,000 square feet over the past year.
Asking rent for all office space in the Fort Myers submarket. Though the market has experienced a growth of 2.4% over the past 12 months, rents are still well below their pre-recession peak of $23.13 per square foot of 2007.
Amount of new office development in Fort Myers related to medical uses over the past year. In all, five new projects containing 197,600 square feet are under construction at present, equating to 1% of the total submarket’s inventory and pre-leased at an average of 97.6%.
Average cap rate involving office sales in Fort Myers over the past 12 months, deals in which the average price per square foot was $115.
Source: CoStar Group