Summerlin Road-- Fort Myers

By Gary

Tasman

Few

places in Lee County can boast the tremendous amount of commercial real estate

activity experienced along the Summerlin Road corridor. Although around nearly

every turn, construction cranes and sold signs dot the landscape, some areas of

Summerlin Road are more active than others. This exciting corridor provides a

comprehensive study of the various phases of commercial real estate (see

chart). The easiest way to identify the different phases is to break them up

into manageable submarkets to examine individually.

Submarket

#1

Colonial

Boulevard to Boy Scout Drive

This

section of Summerlin has been the major benefactor of the completion of the

Mid-Point Bridge construction. Several high profile office commercial projects

have entered the market in the last three to four years. Most recently, Heart

Associates built a 31,452-square-foot medical office building; The Foot &

Ankle Group built a 10,000-square-foot building; and Colonial Bank, AG Edwards,

and Fifth Third Bank all have staked positions in this section of Summerlin.

Several parcels are available and some speculative building is taking place as

a result.

This

type of activity classifies this submarket in the growth phase of the real

estate cycle. During this phase, expect continued building, increased

absorption of office space and continued growth in occupancy rates of

multi-family.

Submarket

#2

Boy

Scout to College

This

section of Summerlin Road seems to be exploding with new construction activity.

Phase I

of Summerlin Professional Park, a 90,000-square-foot office park is scheduled

to break ground in January 2001. The office condominium project, which will

surround a four-acre lake, is part of a two-phased project that will add an

additional 100,000 square feet with projected build-out in five years. The

developer is seeking a high profile retail, hotel, and restaurant complex as an

anchor. At the corner of College Parkway and Summerlin Road, construction has

started for Hilton Suites and the Smith Barney building has been completed.

Some outparcels are still available.

This

submarket is in the early growth phase cycle. Expect more land sales to

end-users, and significantly more building than in submarket #1. This area

carries a very strong opportunity for investors to get in during the early

phases of the real estate curve and get out as the curve begins to mature.

Expect to see several 1031 investment opportunities. Speculative office and

retail building will occur as new office and retail users enter the market over

the next 12-24 months.

Submarket

#3

College

Parkway to Cypress Lake Drive

This

section is completely built out and several of the buildings have been sold to

secondary users or are currently on the market for lease and for sale. Leases

have matured and tenants have opted to either stay put with shorter term leases

during their renewal periods or relocate to places with equal or better

visibility.

Typically,

when a buyer makes a decision to build or remodel, with all other factors being

equal, the buyer/owner will most likely choose the newer space. Therefore,

older buildings along this corridor aren’t as attractive to buyers/owners. Two

examples are the RE/Max and CitiCorp buildings, which both initially sold for

more than $200 per square foot. In today’s market, a buyer could build a brand

new facility for less than the initial price.

This

segment of Summerlin Road has peaked and is in the maturation to migration

phase. Expect to see higher vacancy rates and lower rents as users opt for

newer space with equal or better visibility immediately north and south of this

section.

Submarket

#4

Cypress

Lake Drive to Gladiolus

With

the proliferation of new residential property at Reflection Lakes, the increase

in residential units will increase demand for retail, multi-family and hotel

product. RE/Max, Raymond James and Busey Bank have already relocated to this

area. Mama Pasta’s, a popular Italian restaurant, is currently under

construction and a mixed-use retail project is in the planning phase. An

upscale multi-family apartment project also is expected in this area.

Expect

very strong user demand in this quadrant with high occupancies and high rental

rates. This section is also in the growth phase and will be dominated by

end-user demand.

Submarket

#5

Gladiolus

to Bass Road

There

are some key parcels at Gladiolus and Summerlin which developers will most

likely absorb. Absorption of outparcels along Gladiolus on the south side also

are expected to continue. Office lot sales at the Winkler Extension will

continue to increase. Retail development, which is being driven by rapid growth

of residential development, also will increase. An example of this is the

Publix at Winkler and Summerlin currently under construction.

Further

west, development around Health Park Hospital is booming. A very large

mixed-use project is under construction and a 340 unit multi-family apartment

complex, called Monterey, has recently begun pre-leasing. As this is absorbed,

office and retail will continue to grow in this area. Rents and occupancy rates

will increase based on demand. This area is in the early phases of growth and

absorption will be dominated by end-users.

Submarket

#6

Bass

Road to San Carlos Boulevard

Growth

and expansion of older development which started at San Carlos and Summerlin

with the Albertson-anchored and Winn-Dixie-anchored grocery stores, will be the

trend in this submarket. Hampton Inn recently opened between Pine Ridge and San

Carlos on the south side of Summerlin and a new RV park also has begun

operations. This section is the gateway to the beaches and overflow is

anticipated from beach development eastward from this intersection. Dominated

by retail and tourist-driven development, expect an influx of hotel/motel, as

well as entertainment complexes such as the new lighted par three golf course

and driving range.

This

segment is totally dependent upon the tourist draw of the beaches and can be

classified as being in the maturing phase of the growth cycle. Growth will

continue and development will be dominated by end-user driven sales; occupancy

will continue to increase.

In

summary, office users and multi-family developers as well as retail space users

and developers will see significant opportunity along most sections of the

Summerlin corridor. Summerlin Parkway will grow as a US 41 alternative route

and key intersections have some of the best demographics, access and traffic

counts in Lee County.

Gary

Tasman is a Commercial Real Estate Advisor with Grubb &

Ellis|VIP-D’Alessandro, a full-service commercial real estate, property

management, and research and valuation company serving Southwest Florida.

Stephen A.Cunningham, MAI, SRA managing partner of the division of valuation

and research of Grubb & Ellis|VIIP-D’Alessandro also contributed to this

article.