The Art Of The Deal

>>There was a time when finding suitable commercial space to lease in Southwest Florida meant being prepared to spend enormous sums of money. Now, with the economy heading south, conditions have changed.

"It was a landlords’ market," notes Paul Sands, a partner and broker with VIP Commercial in Fort Myers. "Now it’s a renters’ market."

A confluence of events has contributed to the situation. Many builders got caught when the economy began to falter, left with unleased space or space that was nearing completion but without tenants to move in. Some businesses have failed, freeing up existing commercial and industrial space, and others were holding back because lease rates were too high for them.

Now, landlords are willing to negotiate in order to get tenants—any tenants—into whatever space they have available.

Jim Donne is vice president of brokerage and leasing for Fort Myers-based Welsh Companies Florida Inc., which primarily represents landlords. He says in Lee County, vacancies in class-A commercial space—defined locally as being at least three or four stories, even if the building is old—went up at least 10 percent in the 18 months prior to November.

The building boom that was under way when the economy took a turn for the worse exacerbated the problem. "We’ve seen some new product come on line that has not been filled up," he says.

In terms of industrial space, high vacancy rates have resulted in quoted lease rates dropping to levels not seen since 1998, says Donne.

In Collier County, demand is still high enough that there is "not a whole lot of negotiating" for class-A space, Donne says. However, the market for class-B space—defined locally as retail or office space in a building less than three stories—is a bit more competitive.

Overall, landlords are looking for tenants with a solid business model and solid backing. Many are willing to bend in order to get and keep such clients. And nearly everything is on the table.