Mid-Year Review Suggests Continued Strength in Commercial Market

Brokers with LandQwest Commercial expect continued strength in the commercial real estate market during the second half of this year. The following is a synopsis of their latest MarketQwest report, which examines the performance of some of our market’s most active sectors over the last six months.

Land

Michael Price, ALC

Land sales and prices remained at healthy levels for the first half of 2017. Currently, residential and commercial land is continuing to gain traction, thanks to new home sales and ongoing high levels of interest from retailers. In recent years, parcels for multi-family development have been in particularly great demand, as evidenced by the thousands of new units now under construction or being planned for Southwest Florida.

Retail

Ashley Knie

With Amazon’s acquisition of Whole Foods, the future of physical retail is more uncertain than ever. While store closings such as JCPenny’s, Macy’s, Sears, Kmart and HHGregg are concerning, recent reports show that retailers are still planning to open millions of square feet of retail space by the end of this year. The fact is, until we know how Amazon plans to use Whole Foods’ 440 stores and 11 distribution centers, we can only speculate. As with any change, the players who adapt and evolve will likely remain in the game while those who maintain the status quo will gradually disappear.

Industrial

Mike Doyle, CCIM

Halfway through 2017, the industrial market continues to benefit from strong sales of existing residential units and a steady increase in new residential development. This is reflected in asking rents and sale prices in Lee County. Compared to this time last year, both increased by 14 percent.

Furthermore, with low vacancy levels and rising rents, new industrial space is being built for the first time since the recession. The largest project, located near I-75 in south Lee County, will provide units of 4,500sf and up, with some yard space. In general, the industrial market is seeing solid performance in Southwest Florida.

Hospitality

Chuck Smith, CCIM

Numerous influences are stirring the hospitality industry’s forecast. Nationally, the good news for hotel operators is that occupancy and average daily rates are trending up. The bad news: so are federal interest rates and new rooms under construction.

Data released for the month of June by hotel researcher STR, Inc., reveals a 73.4% nationwide hotel occupancy rate with continued increases in revenue per available room (RevPAR). However, the state’s year-over-year occupancy rate is trending down, hovering at around 72%. Locally, the Lee County Visitor & Convention Bureau reports that yearto- year occupancy fell 3.8% last winter, with a 5% drop in RevPAR. Although Southwest Florida’s hotel industry is expecting a robust tourist season, new hotels and increased competition could drive average daily room rates lower.

To download the entire secondquarter market report for Southwest Florida, please visit www. lqwest.com.