The rise of online retail and continued regional population growth played a large role in a series of yin/yang real estate transactions that defined Southwest Florida’s top deals of 2024.
Established shopping centers and industrial warehouse buildings stood out when looking at last year’s most lucrative deals. “Retail is obviously still really strong,” says Matt Simmons, a property appraiser for Maxwell, Hendry & Simmons. “People have predicted the death of retail so often. ‘Everybody’s shifting to online, and we’re never coming back.’ But the idea that everybody is going to be buying everything online — nope. That’s not going to happen.”
The arrival of the COVID-19 pandemic in 2020 accelerated online shopping trends in the U.S., boosting annual percentage revenue from about 10% in 2019 to about 16% in 2024, according to a study done by Capital One bank. That 16% figure sounds substantial, Simmons and other area real estate experts said. But because more than 80% of retail revenue still happens in person, it means shopping centers will continue to hold and increase in value.
Vacancies continue to fill, and the Bell Tower shops exemplifies those trends, with Nordstrom Rack replacing Bed Bath & Beyond last year. But it’s the Capital Grille concept just across the parking lot from Nordstrom that will become more of the new normal, said Chase Mayhugh, broker and owner of Mayhugh Commercial Advisors.
“A lot of the clothing and traditional retail you’re used to is going bye-bye,” Mayhugh says. “But if you look at the restaurant front, people are going out to eat. They want those different options. That’s going to continue to happen.”
Because vacancies are filling, large investors have swooped in to purchase retail centers in areas with high traffic counts, said Jim Shiebler, senior vice president of investments for CBRE. Benderson Development spent almost $100 million for two shopping centers at high-traffic locations this year. It paid $54.7 million in June for Carillon Place, a 250,000-square-foot shopping center off Airport-Pulling Road in Collier County, then $40.35 million in September for Cypress Trace, a 280,000-square-foot shopping center in south Fort Myers. Just across U.S. 41 from there, at Market Square, two portions of that shopping center, anchored by Target, sold in May for a combined $23.4 million.
“They’re all on incredible corners,” says Shiebler, who brokered one of the deals himself. College Plaza shopping center off College Parkway in south Fort Myers sold in August for $14.6 million.
“When you look at migration levels and all the population growth, it’s multifaceted,” Shiebler says. “You have employers. You have out-of-state migration. You have the snowbirds. You have the tourists. The alternative to new development is purchasing a property and having it stabilize and increase its rent.”
InvenTrust Properties Corporation, based in Downers Grove, Illinois, did just that. On Nov. 26, the company paid $41.3 million to Farallon Capital Management for The Forum at Fort Myers. This 185,000-square-foot shopping center includes just about everything on the northeast corner of Interstate 75 and Colonial Boulevard, except for the Home Depot and Super Target. The shopping center at 9350 Dynasty Drive includes Buffalo Wild Wings restaurant and Ross Dress for Less among 25 tenants, mostly a mix of dining and retail.
Publix bought Gladiolus Gateway, paying $17.2 million for the shopping center it had been leasing off Gladiolus Drive and McGregor Boulevard in south Fort Myers. Grocery stores always will be in demand, as will places with things to do, Shiebler said.
“I would say similar to how there’s a renaissance of vinyl records, there’s also what we call experiential shopping where people like to sample things,” Shiebler says. “We like to touch and feel. We like to examine it and experience it before we purchase. That is definitely experiencing a resurgence.”
The expected continuation of online retail growth means more infrastructure, such as warehouse and distribution centers, will be needed in Southwest Florida. The largest regional real estate deals of 2024 reflect that.
“One thousand percent,” says Justin Thibaut, CEO of LSI Companies. He brokered a 143-acre land deal Nov. 18 in Fort Myers — Amazon paid $66.5 million for it and announced plans to build and open a 750,000-square-foot facility there by 2027.
“Our area was not comprised of large-scale distribution facilities until recent history,” Thibaut says. “The interesting thing is how fast our area is delivering that product. Take a look at the Alico Road corridor. Take a look at Treeline. Take a look at Luckett Road. The short answer is, we’re just catching up.”
Industrial deals far and away led the list of high-priced transactions. Deal after deal seemed to set records, as well. The Amazon deal set a record for highest-priced vacant land in Lee County history.
That record lasted a month, as Thibaut’s LSI Companies colleague Billy Rollins broke it again Dec. 12, brokering the largest vacant land deal in Lee County history once again, $100 million for 1,745 acres in northwest Cape Coral off Burnt Store. Up to 3,500 homes by D.R. Horton are being planned, plus commercial, medical and possibly even a small college. Construction on what will become the largest master-planned community in Cape Coral will commence this year.
A pair of warehouse deals also set records.
In March, Radnor, Pennsylvania-based EQT Exeter paid $92.5 million for CenterLinks Business Park, which has nine buildings combining for 453,940 square feet near Alico Road and I-75. That made for the largest industrial building transaction in Lee County history.
The record lasted less than eight months. In October, Tri-County 75, an 818,000-square-foot warehouse complex off Luckett Road in Fort Myers, sold for $155.1 million. Chicago-based Walton Street Capital made the purchase.
New York investment company GTJ REIT paying $33 million Dec. 23 for a 106,000-square-foot Frito Lay distribution center off Oriole Road in south Fort Myers became “just another day at the office,” said Adam Palmer, who along with Mike Doyle of LQ Commercial brokered the CenterLinks deal.
“Retail becoming more industrial was exacerbated by the pandemic,” says Palmer. “The pandemic also led to massive migration. The increased migration meant an increased demand, not just for retail, but for services. But then you had the storms, too. It created the need for even more industrial space. Because you had such a large percentage of people needing new kitchens or new roofs.”
Even before the pandemic and hurricanes Milton, Helene and Ian, the industrial sector in Southwest Florida was underbuilt, Palmer said.
“No pun intended,” Palmer says, “you really had the perfect storm.”
As the calendar turns to 2025, Thibaut expected industrial to continue to grow, and for retail centers to continue to rise in value, given the costs to build comparable shopping centers from the ground up.
“It certainly feels different,” Thibaut says of online sales being below 20% of the total. They feel higher than that, he said, “until you get in your car, and you go to any retailer around here, and you can barely park. And you realize, ‘Wow.’”
The simplicities of building a 100,000-square-foot industrial warehouse offset the complexities of building a 100,000-square-foot retail center, Thibaut said, meaning he expected more of the former and fewer of the latter to be built. Retail centers will trend smaller.
“The percentage of e-commerce is expected to grow,” Thibaut says. “E-commerce has the ability to grow much faster. Is it going to push brick and mortar away? No. But is it going to continue to eat away at in-person sales? Absolutely. I think retail centers will continue to happen, but it’s going to be mixed use, where it’s retail, office, residential, health care all mixed into one. Like Bimini Basin (in Cape Coral). Like Mercato (north Naples). Like what they’re doing in Estero.”
Office market stays strong
Family Health Centers of Southwest Florida paid $15.5 million in September for 81,000 square feet of office space at 2234 and 2270 Colonial Blvd. in Fort Myers. Palmer brokered that deal, the largest office deal in terms of square footage in 2024.
“I think one of the interesting macro perspectives is that the office market in Southwest Florida is undeniably one of the healthiest office markets in the entire country,” Palmer says. “Maybe a top five office market. The office sector has taken a beating since the pandemic with the work-from-home movement. There’s been major banks out there saying they aren’t lending a single dollar in the office sector. A lot of pain is being felt in the major markets across the country. Whereas in secondary markets like Southwest Florida, we have the equilibrium. There’s really only a handful of those opportunities available.”
Evangelical Christian School jumped on one of those opportunities. Although the 110,000-square-foot facilities at 4501 Colonial Blvd. and 4445 Winkler Ave. aren’t “office” per se, they had been used by Hodges University for education. ECS purchased the school buildings for $28.6 million in April and moved the high school there in time for the 2024-25 school year. Thibaut and colleague Christi Pritchett brokered the deal on behalf of the seller, and Randy Krise of Krise Commercial Group represented ECS, which will continue to operate its middle and elementary schools off Beacon Boulevard, as they have since opening in 1973.
Then there’s an office deal that already happened. The Bank of America building in south Fort Myers off U.S. 41 didn’t change hands last year. The current owner paid $9.8 million for it in 2019, then spent close to $700,000 last year on giving the building a facelift.
“It’s tough to develop new office space,” says Mayhugh, who is one of 12 tenants in the five-story building that will get upgraded elevators this year. “Office is a lot more expensive to build than industrial. You’re talking $500 per square foot. You can buy for significantly below that.”
Multifamily sales slow, then pick up
Two years ago, apartment complexes dominated the year-end transaction list. In 2024, not so much. But when apartments sold, they still commanded a healthy price. They also sold at a more rapid clip from June through December than they did from January through May, prior to interest rates lowering.
Tyler Minix of Newmark, a brokerage firm, landed a large, first-half-of-the-year deal, brokering Cape at Savona Point, a 319-unit apartment complex in Cape Coral, for $81.25 million in January.
Jamie May, owner of JBM Institutional Multifamily Advisors, brokered Charlotte Commons, a 264-unit Port Charlotte complex built in 2022. It sold for $66.5 million in February. May followed that deal by brokering Coral Pointe at The Forum in Fort Myers, with 252 units built in 2017. It sold for $56 million in March. Brantley Pines, a 296-unit Fort Myers complex built in 1997, sold for $57 million in June. And Bellavista at Vanderbilt Way in north Naples, a 48-unit complex built in 2023, sold for $18.1 million in December.
“Since June of 2024, we’re seeing activity pick up as far as the amount of bidders bidding on the deal,” May says. “Previously, we were getting 15 to 20 offers on the same asset. Now, we’re getting 35 to 40. A lot of the larger institutional players, like investment managers, insurance companies, endowments, as well as DST funds (Delaware Statutory Trusts), are now back in the marketplace. And we’re actually now even seeing deals come with nonrefundable, seven-figure deposits. Investors are trying to win the bid over some of their competitive peers.”
The deal of the quarter-century
In October, a $620 million land deal believed to be the most lucrative in Southwest Florida history went down.
About 2,000 acres, including an active rock mine, changed ownership. Harvey Youngquist’s Alico Road LLC, which had turned the land into a rock mine and facilitated it with state-of-the-art equipment, sold a combined 23 properties near the western end of Alico Road to Martin Marietta North Texas Cement Inc.
Records are made to be broken. But from the beginning of time and likely at least through 2025, no deal should top this one.