S
outhwest Florida's industrial sector reached unprecedented heights last year, thanks in large part to three massive deals worth a combined $280 million. However, industry expert Matt Simmons cautions that the market's overall performance was softer than previous years.
The trio of transactions included two office parks and a single-tenant property occupied by Cheetos, all located in Lee County. These deals not only contributed significantly to the region's commercial real estate sales but also helped industrial properties make up 41% of the market share, surpassing last year's 29%.
According to Simmons, managing partner of Maxwell, Hendry & Simmons, retail took a hit with a 42% share of sales, down from 53% in the previous year. Office properties maintained a steady 17% share, mirroring last year's numbers.
Simmons notes that while industrial sales increased, this gain is somewhat misleading due to the three large transactions accounting for nearly half of the total industrial sales. "The industrial market was definitely softer from a sales volume standpoint in 2024," he said.
Despite this, Simmons sees positive signs for the sector. The two business parks were acquired by out-of-state institutional investors who expressed interest in expanding their presence in Southwest Florida. This influx of new capital could signal a promising future for the region's industrial market.
The overall commercial real estate market in Southwest Florida is experiencing some challenges, particularly in retail and office sectors, where sales volume has dipped. However, Simmons remains optimistic about the region's prospects, citing its resilience after a 10-year bull market that was influenced by external factors such as pandemic relief and insurance money.
As the market adjusts to new realities, Simmons advises investors to focus on key metrics and develop strategies tailored to the current landscape. "We're performing quite well as a market right now," he said, "but you have to know what matters."
Here's a snapshot of the Southwest Florida commercial real estate market:
**Top Industrial, Office, and Retail Sales by County (Quarter-to-Date)**
* Lee: Tri-County 75 ($155.1M), Naples Industrial Estates ($17M), Kazwell Light Industrial Mall ($1.26M)
* Collier: Hodges University campus ($28.6M), Truist building ($21.25M), Florida Cancer Specialist & Research Institute ($4.89M)
* Charlotte: Cypress Trace ($40.35M), Carillon Place ($54.7M), AFC Urgent Care and Kahwa Coffee ($4M)
**Existing Inventory (Quarter-to-Date)**
* Lee: Industrial buildings 2,482, rentable square feet 42,118,556, vacancy rate 5.7%
* Collier: Industrial buildings 1,073, rentable square feet 14,495,422, vacancy rate 2.6%
* Charlotte: Industrial buildings 500, rentable square feet 5,876,719, vacancy rate 8.8%
**2024 Commercial Sales Volume by County**
* Lee: $460M (Industrial), $162M (Office), $379M (Retail)
* Collier: $110M (Industrial), $62.3M (Office), $196M (Retail)
* Charlotte: $6M (Industrial), $16.3M (Office), $20.6M (Retail)
**SWFL Commercial Sales Volume by Year**
* 2024: $576M (Industrial), $241M (Office), $596M (Retail)
* 2023: $379M (Industrial), $236M (Office), $700M (Retail)
* 2022: $431M (Industrial), $377M (Office), $1B (Retail)
* 2021: $401M (Industrial), $548M (Office), $1.1B (Retail)
* 2020: $277M (Industrial), $251M (Office), $634M (Retail)
