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Business Observer Friday, Jan. 24, 2020 3 weeks ago

Seagate Development's NeoGenomics' deal the result of being in the right place and having the right relationship

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Company nurtured a long-standing landlord-tenant tie with the cancer screener for more than a decade. It's paying off now in a big way.
by: Kevin McQuaid Commercial Real Estate Editor

NeoGenomics Inc. evaluated several developers when it began scouting for a partner for a new headquarters in mid-2018, but ultimately it didn’t have to look any further than its existing landlord.

Earlier this month the cancer screening company made official an announcement that Seagate Development Group of Fort Myers will oversee a new $60 million headquarters in a burgeoning part of Fort Myers, along Three Oaks Parkway near Alico Road and Interstate 75.

Though the relationship with Seagate undoubtedly helped — the company has been a tenant in Seagate-related projects for 15 years, starting with just 5,000 square feet in the 340,545-square-foot Westlinks Business Park — NeoGenomics officials stressed that as a publicly traded entity it would be required to seek multiple bids for the headquarters project.

“They made it very clear to us that despite our ongoing relationship, this would be an open bid process, because of their status as a public company,” says Matt Price, Seagate’s CEO.

Ultimately, Seagate prevailed over at least a pair of other short-listed developers.

“They looked at a lot of different options, but we like to think that we won the business because we, as a local development firm with that expertise, were able to point out to them issues such as wetlands that other developers could not,” Price adds.

“Local knowledge, in our opinion, is not something that can be duplicated.”

NeoGenomics’ officials did not respond to a request for comment about Seagate or the headquarters’ selection process, and terms of its lease with the developer were unavailable.

The company also received economic incentives equal to $25 million to maintain its new headquarters in Fort Myers.

NeoGenomics becomes the third major home-grown expansion in Southwest Florida in as many years, following deals by Gartner Inc. and Arthrex Inc. — each of which are completing 300,000-square-foot expansions in Lee County.

In the case of Arthrex, the medical device maker’s new facility also will serve as its corporate headquarters.

NeoGenomics’ new twin-structured complex of 150,000 square feet will be split evenly between global corporate offices and high-tech lab space for oncology testing for physicians, Price says, on a 14-acre site.

Seagate, which will serve as developer, construction manager and site contractor and oversee general contractor Deangelis Diamond, which will build the project from a Studio + architectural design.

Seagate and Deangelis Diamond are expected to break ground on the pair of NeoGenomics’ buildings early this year and complete the headquarters in late 2021.

Gary Tasman, CEO of commercial real estate brokerage Cushman & Wakefield | Commercial Property Southwest Florida, whose firm represented NeoGenomics, says the company appreciates the many attributes Southwest Florida has to offer.

“Southwest Florida is a great place to do business,” says Tasman, whose firm became involved in the headquarters search through Cushman & Wakefield’s Boston-based medical and life-sciences practice.

“They’ve grown here and have relationships, so why change that?” he adds. “They as a global company can do everything they need to do right here from Fort Myers.”

Tasman also notes a Cushman & Wakefield analysis of everything from quality of life, area transportation, the quality of education and the workforce and other factors pushed Fort Myers to the fore.

James Nulf, Seagate’s president, says the region’s international airport, area roadways and universities also help give Lee County a boost — together with Florida stalwarts like lower taxes and premium weather for a majority of the year.

Both Price and Nulf also praise the efforts of Lee County Economic Development officials, which cut through what could have been particularly thorny permitting issues and helped create an environment that welcomed the company’s expansion.

“Southwest Florida is happy to grow and they create that environment,” Price says. “It’s not the way it was 10 years ago in Lee County. Today, they do what they have to do to solve problems, like permitting. In a lot of places, for a project such as NeoGenomics, it would take two, maybe even three years to obtain all of the necessary permits. Companies today can’t wait that long. Business moves too fast.”

JIM JETT — Seagate Development Group Principals Bill Price, James Nulf and Matt Price.

NeoGenomics, too, has been moving fast.

After starting in 5,000 square feet of space, the company within three years grew to 28,000 square feet. From there, growth was incremental — an additional 5,000 square feet here, another 10,000 square feet there.

Before long, the company was one of Seagate’s largest tenants, at 60,000 square feet in five separate buildings.

By the time NeoGenomics began considering a new, stand-alone headquarters and chose its developer, its space requirement had swelled to 90,000 square feet.

Seagate surmised the company had underestimated itself.

“We quickly realized that 90,000 square feet wouldn’t be nearly enough space for them, given their track record of growth and the prospects for their future,” Price says.

To be safe, Seagate and NeoGenomics have baked into their deal a plan to add as much as 100,000 square feet of additional space to the headquarters on its 14-acre tract if or when the company requires it.

Nulf credits the space analysis to Seagate’s in-house design team, which executed a plan for NeoGenomics’ occupancy.

“We went from a piece of paper to a fully-fleshed out world headquarters pretty quickly,” he says.

Price adds he believes Seagate’s many disciplines have helped the project proceed at a seamless pace.

“There are a lot of people that can build buildings, but to be a developer and have so many other capabilities in one place takes out a lot of variables, we contend, and helps the client.”

Price also says Seagate has learned a valuable lesson from working with NeoGenomics.

“You have to treat every tenant the same, with the same level of respect,” Price says. “Because you never know who is going to grow. Look at NeoGenomics. They were a start-up and now they’re listed on the NASDAQ (stock exchange).

“For us, the lesson is if you’re there for someone the whole time, and every time, and you don’t try to squeeze every dollar out of a deal, you’re going to be successful.”

 

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