If you're looking for signs of the economic recovery, consider having a chat with Matt Nolton.
Nolton, the CEO and principal engineer at the firm he founded in Naples, Forge Engineering, is usually among the first people to see future development plans because of the soil analysis his firm performs for land buyers.
“We've started doing work on raw land again,” Nolton says. It's the first time his two drilling rigs have been actively testing soils for future construction since the beginning of the residential real estate downturn in 2006.
Residential developers such as Minto Group, Lennar and others have acquired large tracts in Southwest Florida and are preparing to build homes again. There's even talk of new condo towers, Nolton says.
“In 2010 we started to see values stop falling and residential developers were starting to look,” Nolton says. The first sector of real estate to recover was in homes priced in the $1 million-plus range. “The high end came back with a vengeance,” Nolton says.
Still, not all areas of residential real estate are on the path to recovery yet. The moderately priced area of Golden Gate Estates east of Naples continues to struggle, for example. “There's still properties to be absorbed,” Nolton says.
But Nolton says there are investors pooling cash to develop commercial real estate, too. “Developers are out there, they're going down that road,” he says.
In particular, Nolton says large blocks of industrial warehouses could be built soon. “The industrial property is gone; the good stuff has been absorbed,” he says. “Retail is starting back up.” Office space is stagnant, though there is some medical space being developed.
Commercial is likely to follow the resurgence in residential construction that is now under way. “It's inevitable barring something like a stock market crash,” says Nolton, who says surging property values kept him from buying a commercial building for Forge last year.
Already, Nolton has worked on projects such as the expansion of the Inn on Fifth and the new Robb & Stucky furniture building. “There are big projects in the wings,” says Nolton.
Financing is now becoming more widely available and banks are starting to lend again on real estate deals. Still, pools of private investors continue to lead the recovery. “We're seeing so many cash deals,” Nolton says.
Nolton is so encouraged by the recovery so far that he plans to invest $100,000 in marketing efforts this year. This includes sponsoring industry meetings and charitable contributions.
To be sure, Forge suffered like most firms tied to the fortunes of real estate in Southwest Florida. Nolton formed his firm with his wife, Roxann Nolton, in 1996 after running the Naples office of Atlanta-based Law Engineering.
Success came right away for Nolton, who graduated from high school in Naples. Forge grew 20% to 25% a year and had as many as 45 employees at offices in Naples, Bonita Springs and Fort Myers.
But the downturn forced Nolton to shut down the Bonita Springs and Fort Myers offices. Today, the firm has 14 employees, though Nolton says he's looking to hire more as the work returns. “No one was ready for the what happened,” says Nolton, who is taking a careful approach to growth.
Fortunately, the company had diversified into engineering of existing structures such as condo towers, which kept some business coming in during the downturn. For example, Forge provided engineering services for water intrusion, roof repair or exterior painting of large buildings.
Nolton doesn't disclose revenues, but he's confident that growth of 30% or better is achievable this year from the northern boundary of Lee County to Naples and Everglades City.
But don't expect Nolton to open new offices yet. “That'll be the last thing I do because it was really painful to close them,” he says.