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When Hertz announced in 2013 it would locate its global corporate headquarters in Estero, it instantly boosted the fortunes of the whole neighborhood.
The $85 million, 248,000-square-foot Hertz building is now under construction near the corner of U.S. 41 and Williams Road in Estero, a newly created municipality halfway between Naples and Fort Myers in South Lee County.
But while commercial-land prices have recovered in the area, they're only about halfway back to the peak in 2005 based on recent land sales. “There's no Estero bubble happening,” says Andrew Falde, principal and co-founder of Sabal Tree consulting firm and a commercial investment specialist with Re/Max Realty Group in Fort Myers.
An influential group called the Estero Council of Community Leaders commissioned Falde and business partner Cameron Schwartz of Sabal Tree late last year to conduct a study of the remaining vacant land in Estero's commercial corridors. “My job has been to see what are the developers and investors going to actually be doing,” says Falde.
Although the report is not yet available, Falde recently discussed some of his findings following discussions with landowners and undisclosed developers. “Most of the landowners don't want to build,” Falde says. “They're investors.”
Prospective buyers and developers are keeping their plans private for obvious competitive reasons, but they include a mix of residential, retail, entertainment and office uses. While Falde says the area doesn't expect to land another company the size of Hertz, it's not unreasonable to expect that national companies might set up satellite offices in the area.
The challenge for a developer is to make a project financially feasible while satisfying the preferences of residents in the area. What's more, these residents are scheduled to elect a new village council next month after voters in November approved the creation of a new Estero municipality. “The election will create more certainty,” says Falde.
For example, retail uses command some of the highest rents, but residents believe there are too many stores. Falde says his study shows that the vacancy rate for retail in the area is an ultra-low 3%, justifying new shops. Indeed, the smallest outparcels of land command some of the area's highest per-square-foot prices because of their future retail use (see chart).
Indeed, the council recently published the findings of another report it commissioned, which suggest pedestrian-friendly development in the remaining undeveloped areas of Estero. But that report by land planners Bill Spikowski and Seth Harris reads more like a wish list for how future development should proceed.
Falde says he hopes his report will provide some guidance to the new village council to understand the economic feasibility of commercial projects and bridge any gaps with the village's vision. “It'll help the new council with what's going on at the ground level,” Falde says.
Estero land sales
Here are some notable land sales recently in Estero, an area in South Lee County that is attracting attention because of the construction of Hertz' global corporate headquarters.
Follow Jean Gruss on Twitter @JeanGruss
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