For years, Fort Myers and Naples saw the explosion of new retail construction fueled by rapid population growth. Currently there is a new retail trend in Southwest Florida, according to Frank D1Alessandro and Thomas Woodyard, commercial advisors for Grubb & Ellis/VIP-D1Alessandro. The trend now is toward the redevelopment of older, existing retail centers. "The years of fast-paced retail development in Fort Myers and Naples has left very few prime commercial parcels located at strong intersections. This lack of development-ready retail sites has forced many developers and investors to become redevelopers," says D1Alessandro.

Last year, commercial renovation average permit values soared by 286 percent, mainly due to the extensive redevelopment of several older, failing retail centers. Typically, these centers, prior to redevelopment, are around 50 percent occupied with rents ranging in the $6 to $9 per square foot range. After redevelopment, these centers are generally 90 to 100 percent occupied with rents in the $12 to $20 per-square-foot range. For skilled redevelopers this is a very lucrative niche.

A prime example of retail redevelopment activity is the 83,000-square-foot College Center located at the southwest corner of U.S. 41 and College Parkway, according to D1Alessandro. After buying the center for $3,000,000, LefMark extensively renovated the entire building and attracted new tenants, including Mattress Giant and The Stonewood Tavern Restaurant. Woodyard sites the 137,000-square-foot Cypress Lake Plaza at the southwest corner of U.S. 41 and Cypress Lake Drive as another successful redevelopment which sold for $8.7 million. After a total retrofit, new tenants include Costco, Home Goods and TJ Maxx.

"Over the next few years, expect to see more of the same type of redevelopment mainly in the US 41 corridor, which is the retail spine of Southwest Florida," says Woodyard.

Tom Woodyard and Frank D'Allesandro are commercial advisors with Grubb & Ellis/VIP-D'Allesandro.


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