Commercial real estate investors favor brick-and-mortar retail in Naples

Despite the 2020 pandemic, Southwest Florida remains an attractive location for retailers

Lee & Associates
Published 6:01 a.m. ET October 13, 2020
Cameron Commons is a new retail and office site in Naples, FL.

If you’re looking for signs of the retail apocalypse, you won’t find them in Naples or anywhere in Southwest Florida.

Shoppers are returning to stores, restaurants are opening in new locations, investors are scouting opportunities to invest in shopping centers, and seasonal residents are returning to Southwest Florida earlier than usual.

Only 5.3% of the retail space in Naples is vacant and asking rents net of expenses average $24.41 in the second quarter, up about 4% over the same quarter one year ago, according to commercial brokerage Lee & Associates. Also of note, the first half of the year saw $84 million in sales of retail spaces with an average capitalization rate of 6.4%.

“It’s not all doom and gloom in this area,” said Bill Young, senior vice president with Lee & Associates in Naples. “As we come out of COVID, we’re seeing things open up more, we’re seeing Florida come back to life. The seasonal residents are coming down and they need products and services.”

A resident of Southwest Florida since 1984, Young has guided commercial real estate clients in the region for nearly two decades. He is a successful commercial broker who pioneered the growth of the Immokalee Road corridor near the intersection with Collier Boulevard.

Seasonal residents from northern states ship their cars south in the winter, but Young said they appear to be coming down earlier because he began to see car carriers in Southwest Florida arrive in August.

Investors from high-tax northern states are flocking to Southwest Florida too, in search of attractive investments in retail properties in a business-friendly environment. “I’m hearing from a lot of new clients that they want to leave cities like New York and Chicago. I get calls daily, so I’m confident Florida is going to be in high demand for the foreseeable future,” Young said.

Fact is, Naples’ population continues to shop in brick-and-mortar stores like those found at Cameron Commons for items such as home furnishings and food despite the rise of Internet shopping. Even restaurants will do well, Young forecasts. “Nobody wants to cook here. Everyone wants to go to a restaurant,” he noted.

Still, Southwest Florida isn’t completely immune to the changes sweeping the retail industry. Realistically, some of the locally owned shops and big-box stores will likely close, Young forecasts. “But that being said, our smaller centers remain quite active and we’ve only seen a little bit of fallout,” he said.

Shops and restaurants seeking to expand the size of their business will find more opportunities to move into larger vacant spaces. “We’re seeing a lot of repositioning activity,” Young said. For example, restaurants are seeking more room to accommodate social distancing so they can serve more diners.

Landlords are accommodating new tenants with some concessions, including tenant-improvement allowances and shorter-term leases. “Landlords are looking at rents differently,” Young said.

For now, don’t expect to see much new retail construction until there is more certainty about the future. “I don’t think you’re going to see much more development. There will be a pause on retail centers until we can fully understand the fallout over the next year,” Young said.

While short-term uncertainties are on everyone’s mind, the long-term trends of population growth bode well for Southwest Florida. “The long-term outlook is very positive,” said Young. “It’s not like our economy failed us. There is pent-up money and demand.”

For more information about retail commercial real estate in Naples and Southwest Florida, contact Bill Young at Lee & Associates at 239-230-2187, email byoung@lee-associates.com or Biagio Bernardo at 239-230-2184, email bbernardo@lee-associates.com.  

Members of the editorial and news staff of the USA TODAY Network were not involved in the creation of this content.

About UsThe Local Real Estate Experts

The Naples – Ft Myers office was established in 2011 in response to the explosive growth in Southwest Florida and is now recognized as one of the most successful commercial brokerage firms in Southwest Florida. We are backed by the resources of the largest broker-owned firm in the nation. Each of our nationwide Lee & Associates offices has a strong local ownership combined with a powerful platform from the national network which includes 59 offices and nearly 1,000 brokerage professionals. These resources, combined with the office’s in-depth research capabilities and cutting-edge technology, enables our professionals to offer their clients the highest level of service in the industry.

Learn More