Fort Myers-Naples 3rd in office space use nationwide
Kevin Thorpe, chief economist and head of global research at Cushman & Wakefield US, says Florida and Southwest Florida are growing faster than the nation.
Thorpe says Southwest Florida’s economic growth rate is 6.7%, compared to 6.2% for Florida and 3.4% for the US, according to a recent article by Elizabeth King of Business Observer.
“You can just feel the economic activity everywhere here,” Thorpe told the Horizon Council, a Lee County economic development group, in a recent economic prediction. “Your market has seen explosive growth largely fueled by the influx of businesses.”
One area where the region excels is office space. Following Brooklyn, New York, and Nashville in net office space absorption since 2020, Cushman & Wakefield and Moody’s Analytics data places Fort Myers-Naples in the top three metros. Thorpe calls it one of “few markets” in the country that has absorbed office space.
Thorpe said “office buildings in general around the country are getting emptier.” “Not here.”
Thorpe reported 4.6% office vacancy in Fort Myers-Naples, compared to 20% countrywide.
According to Cushman & Wakefield, Fort Myers needs more office supplies. “If you can deliver a new office building here in the coming years, I suspect you can do well,” adds Thorpe.
Thorpe said the pandemic has caused roughly 1.1 million square feet of positive absorption in Fort Myers-Naples. “This happened when the U.S. shed over 275 million square feet of office space.”
Thorpe expects markets to lose office space for another year before “recalibrating” to the hybrid workplace. “After this year,” he continues, “we’ll see positive demand for office space nationally.”
Due to remote and hybrid employment, Thorpe believes each position no longer requires office space.
According to Cushman & Wakefield, legal, utilities/energy, and media/telecom work methods are around 50% office-centric, which drives demand.
Another Thorpe presentation point:
Job growth is slowing this year. “That applies nationally and locally,” he argues.
Thorpe said the Southwest Florida economy typically provides 6,000 jobs each year, but employment has increased recently. It created 16,000 employment in 2021, 14,000 in 2022, and 8,500 in 2023. Thorpe expects 5,000–6,000 net new jobs in Southwest Florida this year.
Construction and office-using jobs have grown the most since February 2020 compared to April 2024, according to U.S. Department of Labor and Cushman & Wakefield data.
Leisure and hospitality has lost jobs since the outbreak.
“It’s stunning how much they’ve risen here over the last few years,” Thorpe adds of housing prices.
Southwest Florida median property prices rose from $250,000 pre-pandemic to nearly $500,000 today.
“There are housing affordability challenges,” he says, seeing nodding audience members. The good news is housing prices are finally correcting.”
He says that Southwest Florida property values are down 3%-5% this year. “This doesn’t look like a crash,” Thorpe says. “This seems like a rebalancing.”
Cushman & Wakefield expects regional home values to stagnate from 2025 to 2027.
“In general, there’s a healthy outlook for this market,” adds Thorpe. Because it’s Florida, people will keep moving there despite house affordability issues.
This article originally appeared on Business Observer
