Back in March 2024, the sale of CenterLinks Business Park for $92.5 million set an industrial sales record in Lee County. And while that news and number understandably made a big splash, a lot of pieces had to fall into place before a sale like that was even possible.
CenterLinks Business Park was developed, designed and built by McGarvey Development Company. The company was founded in 1984 by President and CEO John McGarvey, first working in the Philadelphia area and then moving to Southwest Florida in 1997. Over the years, McGarvey Development Company has built a reputation in Southwest Florida for its quality work and strong client relationships on projects that range from high-tech medical research laboratories to Class A office space.
After having success with its SouthLinks Business Park at Bonita Beach Road, McGarvey Development Company began construction on CenterLinks Business Park in 2020. The company’s largest commercial development to date, the 42-acre, 450,000 sf industrial park on Oriole Road near Alico Road in Fort Myers kicked off at the right time.
The industrial market was already heating up in Southwest Florida, and then the COVID-19 pandemic kicked it into even higher gear as e-commerce became a necessity, rather than just a convenience. The fact that the park consisted of all dock-high industrial space proved appealing to tenants looking for easy access to both Interstate 75 and Southwest Florida International Airport.
“We couldn’t build it fast enough,” says Jeffrey McGarvey, director of sales and marketing for McGarvey Development Company. “We were constructing buildings, finishing the site and moving tenants in simultaneously due to the high demand in this market.”
McGarvey Development Company originally planned for a five-year construct/ build time. By the end of 2023, though, CenterLinks had a diverse mix of tenants that ranged from an up-and coming linen-cleaning company to a chip manufacturer, and even McGarvey Development Company’s headquarters itself.
That diverse tenant mix was an intentional approach taken by McGarvey Development Company based on lessons learned before and during the 2008 recession. “We had business parks that became vacant because tenants were in similar industries,” says Jeffrey McGarvey. “So, when we decided to reenter the industrial sector as owners and developers, we aimed to have a diverse tenant base instead of clustering similar businesses together as we did in the past.”
Finding that right balance was made easier by the relationships the company has developed over the years. “John has relationships with tenants who have moved from park to park with him,” says William Way, director of assets for McGarvey Development Company. “They know what they’re getting, and they trust it. They know the quality of the space and the craftsmanship will be good.”
Tenants also like the fact that McGarvey Development Company will build out their space to their exact needs and specifications if desired. “It’s very important to have a suite built exactly like a tenant wants, because they’re having to distribute or manufacture in that space to a high level,” says Way.
So, tenants start out with a space that’s built to McGarvey Development Company’s quality standards, and then they can work with the company to take it even further if they choose. “We build to a tenant’s unique footprint and help ensure they are productive,” says Way.
With happy tenants in place and the park humming along, McGarvey Development Company decided it was time to put the property on the market in early 2024.
A GOOD BUY
Once CenterLinks Business Park was on the market, REIT groups and other potential buyers quickly took notice. Philadelphia-based real estate investment management firm EQT Exeter emerged as an interested buyer, partially because of the park’s diverse tenant mix and healthy rent rolls.
“I think that was key to EQT’s analysis of the park as a whole,” says Jeffrey McGarvey. “[Because of that tenant mix] people aren’t going to all walk out and hand you the keys back at once. So, I think that was part of it.”
Increases in costs for pretty much everything during and following the pandemic also means that the rents tenants are currently paying are appealing to a purchaser like EQT Exeter. “The price point for some of these rents, and the fact that a lot of these tenants agreed to five-, seven- or 10-year terms, added value to the purchase,” says Jeffrey McGarvey.
The fact that tenants at CenterLinks were happy with their leases and their units at the business park proved another convincing factor for EQT Exeter that it was making a smart purchase. The positive comments EQT heard when talking with tenants before finalizing the deal helped the company feel comfortable with the purchase, according to Way.
But EQT Exeter and McGarvey Development Company also had a previous connection that was a factor here. John McGarvey is originally from Philadelphia and spent a good chunk of his career there before moving to Florida. Ward Fitzgerald, CEO of EQT Exeter, was familiar with both McGarvey and the quality of his work, so he knew that purchasing CenterLinks Business Park would be a smart decision. That relationship helped during the negotiation process of the sale, with EQT Exeter and McGarvey Development Company settling on a sales price of $92.5 million over a relatively short period of time.
“Being able to close with them within 30 to 45 days for this type of asset was pretty incredible,” says Jeffrey McGarvey.
“What this deal was built on was John McGarvey’s name in the market,” says Way. “And our ability to take a product from 0sf to 450,000sf put tenants in over a three-year period, and have an occupancy rate palatable for outside investors. So local relationships, national relationships and McGarvey’s reputation were very helpful.”
A FOUNDATION FOR THE FUTURE
The success McGarvey Development Company had first with building and developing CenterLinks Business Park and then selling it for a record price is just the beginning for the firm when it comes to industrial projects. “Reputation wise, it’s huge for us,” says Jeffrey McGarvey.
Between the publicity and the cash proceeds, the company is in a good position as it looks toward the future. “We hope it opens up more partnerships, whether it’s with EQT or other large equity firms, now that we’ve put ourselves back on the industrial map,” says McGarvey. “We’d like to continue building large-scale industrial product in Southwest Florida and refine our skills. Maybe we can beat our own recordbreaking price.”
“We’d like to leverage this to build relationships with other private equity firms and do similar deals,” says Way. “Obviously John and Jeff have a good reputation here in Southwest Florida and are known as one of the premier developers. So, it’s about putting that out there and packaging it in a way that best suits us.”
There’s still plenty of room for growth in Southwest Florida when it comes to industrial projects. Though land costs are rising, prices are still a better deal here than in cities like Miami or Tampa. “I think there will be continued industrial growth here as people continue to migrate to Florida and there’s still land to be had,” says Way. “I think it’s a good market to be in.”
McGarvey Development Company still owns SouthLinks Business Park and it’s never been on the market. “There’s only one unit available for lease, the tenants are happy and it’s a great portfolio for us,” says McGarvey.
“It’s been a very successful development ever since we broke ground,” says Way. “That particular project will continue to be successful and stable.”
Next up for McGarvey Development Company is a smaller-scale industrial property on Six Mile Cypress Parkway and Penzance Boulevard in Fort Myers. The 10-acre project will include 80,000sf of drive-in flex space and a new 105,000sf self-storage project. The company hopes to break ground later this year so that tenants can start moving in mid- to late-2025.
“It’s a really cool project and will be McGarvey’s first self-storage project,” says Way. “We have been approached and are discussing a potential joint venture partnership with a group who specializes in self-storage. So, we are actively communicating with other firms and open to partnerships that make sense.”
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