In Focus: Naples office market

8.2%

Amount of vacant office space, on a percentage basis, in Naples at the end of June 2019. Over the past year, the vacancy rate has inched upward by just under 1%. Historically, the rate has hovered around 10%.

(-84,000)

Amount of office space, in square feet, absorbed or removed from the market through leasing activity in Naples over the past year. Negative absorption means that more space came on the market, through downsizings or new construction, than was absorbed, or leased. Combined, in 2018 and thus far this year a total of 177,862 square feet of office space has been negatively absorbed in Naples.

23,300

Amount of new office space, in square feet, completed or delivered to the Naples market in the past year. Historically, an average of 135,289 square feet of new office space comes on the market annually in Naples.

$102,000,000

Amount, in U.S. dollars, of all office space sales in Naples over the previous 12 months. On a historical basis, Naples averages roughly $72.6 million in total office building sales over the span of a 12-month period.

308,800

The size, in square feet, of Arthrex Inc.’s office headquarters expansion under construction at 1250 Creekside Parkway, in North Naples.  The orthopedic medical device company expects to complete the six-story building in October as part of a larger expansion that also will include development of a 160-room hotel. In all, Arthrex occupies 900,000 square feet of office space in the Naples market, making the company the largest private-sector occupier of office space. Since 2011, the company has added more than 1,000 new employees to its workforce, bringing its total to around 3,000. By 2021, Arthrex plans to add another 560 workers to its Southwest Florida payroll.

314,000

Total amount of office space, in square feet, under construction in Naples at present. Arthrex’s expansion — noted above — accounts for more than 98% of the total.

$217

Average price per square foot for office investment sales over the past 12 months. The transactions resulted in an average capitalization rate, or yield, of 7.3%.

$20,969,310

Amount, in U.S. dollars, of the biggest single office building transaction in Naples over the past 12 months. The sale of the seven-story Newgate Tower, at 5150 N. Tamiami Trail, was part of a larger, nine-building deal between sellers Barron Collier Cos. and FoxRock Properties and buyer Tamiami Newgate LLC, an entity comprising members of Netherlands-based investment firm Van Dam, Van Dam & Verkade B.V. When Newgate Tower sold in May, at a 7.0% cap rate, it was fully occupied by PNC Bank and others. The combined Newgate Center/Park North, which total 100,000 square feet, sold for $33 million. IRC International Realty Corp. represented Tamiami Newgate in the deal, while Investment Properties Corp. negotiated on behalf of Barron Collier and FoxRock.

$2,909,390

Amount, in U.S. dollars, of the average office building sale in Naples thus far in 2019. The figure calculates out to $268.61 per square foot.

Source: CoStar Group