Costco pays $55M for 55 acres to build new store in Fort Myers

Costco has closed on the site of its future Fort Myers location, said Chase Mayhugh, who helped broker the deal for Mayhugh Commercial Advisors. 

The wholesale club chain paid $55 million May 12 for 55 acres spanning Colonial Boulevard to the north, Plantation Road to the east and Metro Parkway to the west. 

The property, which appears shaped like a sideways “W” on Lee County’s Property Appraiser website, carried an agricultural exemption that saved the owners millions in property taxes over the years, Mayhugh said. The owners also generated income by selling billboard space, with value increasing after planning began in 2002 for the Plantation Road extension. 

At $1 million per acre, or $22.96 per square foot, the transaction ranks among the highest prices for commercially zoned and entitled vacant land, Mayhugh said. 

By comparison, Waypoint Residential, a Boca Raton-based real estate development company, paid $35 million in February for 60.8 acres at the southwest quadrant of Interstate 75 and Daniels Parkway, or about $12.64 per square foot, Mayhugh said. The Costco deal is nearly double that price. 

“It’s unique that a larger tract is getting that kind of money,” Mayhugh said. “This is definitely one of the larger deals our office has worked on.” 

Mayhugh Commercial Advisors will assist the sellers in reinvesting proceeds through a 1031 exchange and is seeking another retail or industrial project. 

The property took more than 20 years to sell because the seller, Carcione Family Partners LLC, declined to divide it. Mayhugh said he was a senior at Fort Myers High School when the land first hit the market. 

Chuck Mayhugh, founder of the firm and Chase Mayhugh’s father, played a key role in assembling the deal. 

“We worked it together,” Chase Mayhugh said. “It was definitely his deal. But I got involved once Costco got involved. I want him to get the credit. 

“What’s unique about what my dad did, you don’t look for the quick buck. You look at how can we position them the best place possible to get the maximum amount of money. That’s what took so long. Finding a developer who could take this and be willing to pay the price. He did a great job doing that.” 

The site drew interest from other buyers, including during Costco’s due diligence period. 

“They did not want to buy the whole property in the beginning,” Chase Mayhugh said. “We basically forced them into it. Because they aren’t developers. They just needed it for the purpose. But they ended up making it work, which is great.” 

Costco plans to sell some outparcels, with at least one likely to become a quick-service restaurant, Mayhugh said. 

The site includes about 1,100 feet of frontage on Colonial Boulevard, more than 3,100 feet along Plantation Road and roughly 700 feet on Metro Parkway. About 70,000 vehicles pass the site daily on Colonial. 

Costco had been searching for several years for a new site to replace their current Cypress Lake and U.S. 41 location in south Fort Myers, Mayhugh said, noting that parcels with that level of frontage are scarce and this one meets all their criteria. 

Mayhugh said the existing Costco at 7171 Cypress Lake Drive could remain open and potentially be converted into a Costco Business Center, though those plans are not confirmed. The closest such location is in Orlando. 

A business center format is geared toward commercial customers, including restaurants and other local businesses, with an emphasis on bulk food products and business supplies, such as paper goods, furniture and office equipment. The concept serves a different customer base than a traditional Costco warehouse. 

Mayhugh said the new location should help ease congestion at the current store. 

“It’s good for the community,” he said. “It’s been a nightmare getting into that one. We all love going to Costco, but we dread going to that particular Costco. It just gets so much traffic. The ingress and egress just wasn’t designed to handle that much traffic. 

“This one’s going to be much better designed. You’re going to have multiple points of ingress and egress. It’s going to help with the flow coming out of that.”