Commerce Bank acquires FineMark office building for $24M in Naples

While office space property sales languish nationally, this commercial real estate niche is alive and well in Naples. 

Commerce Bank recently purchased the six-story FineMark Bank & Trust building for $24,100,000, a head-turning figure even in Naples. The 41,712-square-foot office building at 800 Laurel Oak Drive abuts the Waterside Shops property in the prestigious Pelican Bay area of North Naples. 

“It’s a beautiful little boutique Class A office building, a little bit of a jewel box kind of building,” said Rob Carroll, a principal of Investment Properties Corp. in Naples who negotiated the Sept. 22 transaction, representing both the buyer and the seller, FLP 800 LLC. 

Built in 1984, the building has featured the FineMark name for more than a decade, but it previously has been topped by the names of other financial institutions, such as Morgan Stanley and BMO. With the latest purchase, the landmark building will continue to carry FineMark’s name. 

In January, FineMark National Bank & Trust finalized its merger with Commerce Bank & Trust. Founded in 2007 in south Fort Myers, FineMark continues to operate as FineMark Bank & Trust, a division of Commerce Bank. 

With FineMark as its largest tenant, the building is 100% leased. Its proximity to the ultra-luxury Waterside Shops and Carnelian Hotel, under construction across the street, plays a role in the sale price. 

“That is arguably the best-located office building in town, period,” Carroll said. “All of the buildings there by Waterside are extremely well sought after.” 

The price per square foot is comparable to prices on Fifth Avenue South in downtown Naples. 

“This one is going to be around $560 a foot and it’s going to set what I believe to be a new record for square foot office in town and by a pretty strong margin,” Carroll said. “I think the price per square foot that’s really going to catch people’s eye and there’s going to be a lot of raised eyebrows because if you look at per-square-foot sales of the Class A in town over the last decade, you’re going to see it in the low- to mid-200s, then it climbed. Then we hit 300 and everybody was like, ‘Whoa!’ And then we had a handful that closed above that.” 

Two years ago, the seven-story Truist Building, nearby at 801 Laurel Oak Drive, sold for $21.25 million or more than $312 per square foot. This summer, the pair of Collier Place four-story office buildings on U.S. 41 in the city of Naples sold for $23.26 million, or about $380 per square foot. 

Carroll believes the FineMark building sale is going to be a local paradigm shift for office space. 

“Of course, nationally, office is still a dirty word. I think it’s starting to get better,” he said. “Most places, office has not been in the headlines for the right reason. Naples has been the opposite of that for quite some time.” 

Subsequently, Carroll has been promoting office real estate to his clients for the last several years. 

“It’s not easy to finance because the banks blanketly don’t want to touch it nationally, unless you find a good local bank,” he said. “I’ve been preaching now is the time to buy.” 

Contrary to what has been making headlines lately, Carroll thinks the local story is really about the health of office, the low vacancy rate and the climbing rates per square foot.   

“We’re seeing the very beginning of a new world of rates, and it’s a reflection of all of the demand in Naples, the lack of product and then, of course, inflation,” he said. “I think inflation is a huge part of it, too.”