2010 Global Market Report - NAI Commercial Real Estate

Fort Lauderdale, FloridaFt. Myers/Naples/Port Charlotte/Bonita Springs, FloridaContactNAI Rauch, Weaver,Norfleet, Kurtz & Co.+1 954 771 4400Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold Income5,305,1825,051,5132,792,167$71,345$51,044Fort Lauderdale is a service market for southeast Florida.The major industries are tourism, finance and service relatedbusiness with a strong segment of international trade.The area is serviced by three seaports, Port of Miami, PortEverglades and the Port of Palm Beach as well as threeinternational airports. Few sectors of the economy aregrowing. Most major industries are experiencing depressedeconomic conditions.The office market is experiencing declines in occupancy andrental rates and is expected to continue to weaken through2010. Values have dropped roughly 30% since 2007. Thereis no new construction in the market.Industrial vacancies are in the 12% to 15% range. Rentsare dropping, with many tenants asking for as much as 30%in rent reductions from landlords and landlords are accommodatingthose requests in order to keep tenants in theirbuildings. There is no new construction planned for 2010except for build to suit space.The retail market has experienced more vacancies eachmonth. Rents are being reduced in order to keep tenants intheir space. Many major retailers have closed stores andthis trend is expected to continue through 2010.New construction has become increasingly difficult. Investorsare holding off on major purchases unless they can buy at40% to 50% of previous values. Capitalization rates are upto at least 8.5% to 9.5%. Financing requires 30% to 50%down and coverage ratios of 1.25% to 1.35%.Multi family has some transactions but most sellers do notwant to discount prices. Sellers may not be able to sell theirproperties without taking huge losses or getting banks towrite down loans. Land sales are all but non existent exceptfor small build to suit deals. The supply of land has beenincreased due to the failure of so many car dealerships andseveral proposed buildings.The policy of most landlords is to do anything to keep thecurrent tenants in place as new tenants are few and farbetween. Lenders are extending loans in a delay and prayprocess. New construction is not on the horizon for 2010.ContactNAI SouthwestFlorida, INC+1 239 437 3330Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold Income1,094,9381,184,949355,978$75,551$53,607Southwest Florida has many positive attributes with acoastal location and excellent quality of life for its residents.The region stretches from the 10,000 islands north to PortCharlotte, and from the Gulf of Mexico east to Lehigh Acres.The area has a significant amount of prominent, former andcurrent business executives and entrepreneurs who live inSouthwest Florida for a good part of the year. This wealth ofexpertise and experience serve as valuable resources to thebusiness community.The area is home to many institutions of higher learning;Edison State College, Hodges University, Ave Maria Universityand Florida Gulf Coast University, which is a member ofthe State University System of Florida. The number of well-educated students creates a valuable resource for localcompanies to draw from. Southwest Florida continues to behome to a growing population of young professionals withopportunities expanding to grow other industries, includingbiotechnology and healthcare.The John Madden Company is planning to break ground onthe Research Loop at the Southwest Florida InternationalAirport. This project will introduce new, high paying careeropportunities that will further propel the region, making itmore than a retirement destination.2009 brought with it a continued increase in vacancy andrental rates and an overall slowdown in development in allsectors of the marketplace. While many companies likeMcGarvey, JED of Southwest Florida and the East Group gearup for “green” and sustainable responsible development, theeconomy dictates they proceed with caution while remainingattentive to the needs and demands of the marketplace.Charlotte, Collier, Hendry and Lee counties reported anincrease in unemployment in 2009. Lee County's unemploymentrate rose to 13.9%, Collier County’s increased to13.1 % and Charlotte County’s figure grew to 12.7%. Theunemployment rate is not seasonally adjusted.The overall opinion is that 2010 will see a regional comebackas welcomed confidence returns to Southwest Florida.Total PopulationMedian Age40Total PopulationMedian Age44.2Fort Lauderdale At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$$$$$32.0028.0022.0024.0020.0015.00$$$$$$34.0032.0026.0026.0026.0020.00$ 33.00$ 30.00$ 24.00$ 25.00$ 23.00$ 18.50N/A17.0%10.0%N/A18.0%16.0%Bulk WarehouseManufacturingHigh Tech/R&DRETAIL$$$6.005.007.00$$$8.007.0012.00$$$7.006.009.508.0%9.0%10.0%DowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$15.0010.0020.0025.00$$$$30.0025.0040.0060.00$ 22.50$ 17.50$ 30.00$ 35.0010.0%15.0%8.0%7.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBD$ 500,000.00 $ 1,000,000.00Land in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-park$$$400,000.00250,000.00250,000.00$$$650,000.00500,000.00500,000.00Retail/Commercial Land$ 650,000.00 $ 1,200,000.00Residential$ 200,000.00 $ 600,000.00Ft Myers/Naples/Port Charlotte/Bonita Springs, Florida At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$$$22.0019.0017.0020.0017.0016.003.503.757.007.0010.0012.0020.00$$$$$$$$$$$$$26.0022.0019.0026.0022.0019.005.004.5010.0013.0015.0018.0040.00$$$$$$$$$$$$$23.0020.0017.0022.0019.0017.004.004.009.009.0012.0014.0029.0020.0%20.0%15.0%50.0%50.0%22.0%20.0%27.0%20.0%22.0%19.0%20.0%20.0%DEVELOPMENT LAND Low HighOffice in CBD (per buildable acre)Land in Office Parks (per acre)Land in Industrial Parks (per acre)Office/Industrial Land - Non-park (per acre)$$$N/A217,800.00130,000.0090,000.00$$$N/A305,000.00215,000.00125,000.00Retail/Commercial Land (per acre)Residential (per acre)$ 450,000.00N/A$ 1,000,000.00N/A2010 Global Market Report ■ www.naiglobal.com 83