Southwest Florida’s strong job growth and population influx is boosting commercial real estate sectors throughout the region, and while there are indications that a commercial property bubble may be forming elsewhere in the U.S., Charlotte, Lee and Collier counties appear poised for further growth.
There is some justification for saying the region may be in the early stages of entering a commercial real estate bubble, though. Commercial property prices have risen 60% since 2012 in the U.S., far outstripping residential appreciation or yields from other investments. That phenomenon has caused investors to flood markets nationwide, pushing up prices to levels that will require vast rental increases to support deals — on top of anticipated interest rate hikes.
But that may not apply to Southwest Florida in the same way it would in, say, a San Francisco, Washington, D.C., or Boston. Thanks to job growth and household formations in the three counties that has outpaced Sarasota and much of the Gulf Coast — though the Orlando area continues to lead the state in job creation — the region remains healthy. There’s ample runway left in the multifamily and especially industrial sectors.
The latter has grown in popularity as online commerce has gained traction among consumers as never before. People are clicking, clicking, clicking, but those merchants need warehouse space to fulfill those deliveries. Fort Myers, in particular, has been viewed as a hub for Southwest Florida industrial space because of its fairly centralized location in the region and proximity to Interstate 75. The location has prompted at least one development firm to consider building speculative industrial space in the area for the first time in several years.
By contrast, a handful of developments in the Interstate 4 corridor between Tampa and Orlando — an area that can reach roughly 18 million Floridians within a 24-hour drive — could deliver more than 2 million square feet of new distribution space on a spec basis this year.
To learn more about the commercial real estate market in SWFL and how you can sell your vacant land, contact an expert member of the 9 Core Realty Team!