Few submarkets have been as active over the past three years as the Lee County industrial market. In addition to a plethora of new product stemming from an associated residential development, general economic conditions, hikes in employment and changes in the way products are delivered, the county — comprised of Fort Myers, Bonita Springs, Cape Coral, Estero and Lehigh — has experienced a whittling of vacancy rates stemming from positive absorption.
Not surprisingly, rental rates for office/industrial projects known as “flex” buildings, warehouses, distribution and fulfillment centers as well as manufacturing sites also have risen considerably since the first quarter of 2016, according to data compiled by real estate research firm CoStar Group Inc.
Taken together, the dynamics have caused the overall inventory of Lee County industrial buildings and that of all of Southwest Florida — made up of Lee, Collier and Charlotte counties — to swell over the past three years.
In Lee County, too, a pair of recently completed industrial projects developed on a speculative basis have temporarily spiked availability, but analysts believe both will be among the first to be leased in the coming year thanks to favorable locations near Southwest Florida International Airport and building components such as clear ceiling heights, truck courts, updated fire suppression systems, vehicle parking and overall size.
$6.30 vs. $9.12
Asking rental rates for all industrial space in Lee County at the end of the first quarters of 2016 and 2019, respectively.
92,164 vs. 125,000
Amounts of the largest industrial leases, measured in square feet, in each first quarter, in 2016 and 2019, in Lee County. Three years ago, FedEx’s lease was a renewal for space it occupied at 2670 Colonial Blvd., in South Fort Myers. In 2019, the largest deal involved Robb & Stucky’s move into its new corporate headquarters and distribution center, also in the South Fort Myers submarket.
4.7% vs. 3.2%
Vacancy rate for all industrial space in the Southwest Florida market at the end of the initial quarter in 2016 and 2019, respectively.
2 vs. 13
Number of new industrial projects under construction In Lee County at the end of the first quarter of 2016 and 2019, respectively. In 2016, the two buildings comprised 223,943 square feet, whereas at the end of the first three months of 2019 the total was 443,877 square feet.
$6.80 vs. $7.85
Asking rents for logistics, fulfillment and distribution space in Lee County at the end of the first quarter of 2016 and the comparable period in 2019.
9.3% vs. 5.8%
Vacancy rate for so-called “flex” space — typically a combination of office and warehouse space — at the close of the first quarter of 2016 and that of 2019. At the same time, the “availability rate” — the total amount of space on the market through a combination of vacancy, potential subleases and other factors — declined from roughly 12% to the current mark of about 8%.
114,337 vs. 106,138
Amount, in square feet, of space positively absorbed in the Southwest Florida industrial market in the first quarter of 2016 and 2019, respectively, through leasing activity.
48,732,512 vs. 50,213,242
Amount, in square feet, of all industrial space in the three-county Southwest Florida market at the conclusion of the first quarter of 2016 and the comparable time period in 2019. The overall 3% gain in space came as a result of 41 new buildings being constructed during the three-year period.
Source: CoStar Group