Real Estate

 

Bonita Commercial Space
The market flourishes under continued growth 


By Karen Johnson

As Lee and Collier counties continue to grow together, increasingly becoming one seamless commercial and residential market, Bonita Springs flourishes at the epicenter. This bodes well for all of Bonita's real estate market segments, including its office market, which is starting to emerge as a convenient alternative to Fort Myers and Naples.

What are some advantages?

For Lee and Collier companies looking to expand regionally, Bonita is a safe site for satellite offices. For companies new to the area, locating in Bonita offers the advantage of drawing from Lee's and Collier's labor markets. This is especially important in these low unemployment, tight labor market times.

Bonita has a few corporate headquarters (Abbey Carpets, WCI Communities) to build upon and a strong educational presence (Florida Gulf Coast University's Center for Leadership & Innovation and Walden University). The area additionally has close proximity to recreational and entertainment outlets (TECO Arena, Naples Philharmonic Center for the Arts) for entertaining clients or catching an event after work.

Bonita's and Estero's strong residential and retail markets will continue to draw more office users. Colony Plaza, a 30,000-square-foot office and retail center, is expected to be completed by February, with the restaurant Sanibel Steakhouse already signed to go in the complex with a free-standing building. Phase two of Crown Lake Center, a class-B space, office/retail project with Bonita Beach Road frontage, has broken ground. And Piazza De Bonita is being built on West Terry Street with per square foot retail rates in the $16 to $18 range.

This all adds up to an attractive alternative to the busier Naples and Fort Myers markets.

Old versus New

A recent market study done for the Bonita Springs Chamber of Commerce's Real Estate Roundtable found Bonita's office market could double from 480,000 square feet to 931,000 square feet in the next two years if all of the planned projects are completed. (Note: the survey was of buildings 10,000-square-feet or larger with primarily office not medical or retail tenants). That's a tremendous amount of growth.

Among the projects:

West Bay Center this 78,000-square-foot, two-story office building, developed by Atlantic Gulf Communities, will include covered parking and a conference center. It is located just south of the existing West Bay sales center on U.S. 41 in Estero.

Corkscrew Palms Office Park This complex located on the south side of Corkscrew Road will include a 30,000-square-foot multi-tenant building and eight single-story buildings ranging in size from 2,800 to 6,000 square feet.

This adds new inventory to some very successful Bonita office projects that have been done in the past. In fact, the vacancy rates for Bonita's inventory of older office buildings (9 percent) and recently completed office buildings (13 percent) is lower than the county's overall office vacancy rate of 16.9 percent. The question is how quickly will all this new product be absorbed.

Firm footing

The office market does have a firm foundation on which to build, and some successful older projects that continue to flourish. Examples here are Sunshine Professional Plaza's two buildings, A (opened in June 1986) and B (1992); and the Bonita Bay Executive Center (61,000 square feet), built in 1988 and sold in 1998 to McGarvey Development Company for just under $100 per square foot.

According to the Roundtable Survey, rental rates for the older buildings are very reasonable, ranging from $9 to $20 in gross leases and $9.75 to $13 in net leases, with CAM averaging $3.75. This older space makes up 197,000 square feet of the market.

Newer buildings, those completed in the last 12 to 18 months, include Bernwood Courtyard, which is currently adding 12,000 square feet. to bring its total to 40,000 square feet; the Promenade's 20,000 square feet of office in this retail development; and the Walden Center. According to the survey, rental rates for this product range from a low of $11 per square foot at Westgate Center to $20 at the Promenade. CAM ranges anywhere from 3.05 to $5.60 per square foot.

Another of the newer buildings is Colony Corporate Center North, a recently completed two-story, 20,250-square-foot building at the northern entrance of Pelican Landing. Tenants include WCI Communities and Old Florida Bank. It was 50 percent pre-leased in January when it came on line and now is 100 percent leased. Colony Corporate Center South (phase II) is now pre-leasing.

A look into future

The surging office market in Bonita has benefited from tremendous recent growth in its residential and retail markets. Just as the markets paved the way for office growth, the flurry of construction and new products on the market has been followed by a slower period to allow for absorption.

Bonita is attractive to new and expanding local companies looking to grow their markets and draw from a larger labor pool. Nevertheless, the primary considerations for success in the Bonita office market will be how much inventory will come on line, in what period, and how fast it will be absorbed by the area's continuing growth.

Karen Johnson, a transaction professional specializing in the retail and office market, is with Grubb & Ellis|VIP-D'Alessandro, a full-service commercial real estate firm with offices in Fort Myers and Bonita Springs.

Research and information for the article was also provided courtesy of Marie Lonidier, broker and property manager for Walden Center in Bonita Springs, and Becky Andrews, broker and manager for Grubb & Ellis's Bonita Springs office.

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