Tourism down, but real estate booming as we enter new year
Just 31 years ago, Realtor Joe Pavich bought one of the first 800 homes in Estero — and he couldn’t even get a pizza delivered.
“Now, I walk to Ruth’s Chris,” Pavich said of the famed steakhouse located at Coconut Point Mall.
In 1990, Estero had a population of little more than 3,000. It now sits at more than 32,000, and in the next decade, that number is expected to reach 50,000, regional economists predict. Also by 2030, thousands more jobs are expected to come to the area, according to Lee County Economic Development Director John Talmage.
Despite a global pandemic, Estero continues on the fast track to growth. Coconut Point and Miromar Outlets have been joined by other retail and commercial centers eager to be in an area with an international airport, a Division I college, an 8,500-seat arena, a professional hockey team and a Fortune 500 company — just 30 minutes from the beach. In a few years, Estero will likely add a riverwalk.
This community has gone from being in the middle of nowhere to the center of everything.
Projections show Estero’s demographics are changing. The population will get younger, with a new elementary and middle school planned to be built north of Corkscrew Road along Three Oaks Parkway to accommodate just under 2,400 students. Previous overcrowding at Estero High School (with a current enrollment of nearly 1,700) was relieved when Bonita Springs High School opened three years ago.
Real estate not slowed by COVID
As Pavich explained, Estero gets the benefit of “trickle down” after 24/7 Wall St. recently named the Cape Coral-Fort Myers metropolitan area No. 1 for inexpensive cities where Americans are looking to move; and it also gets “trickle up” because all but 7 percent of Collier County has been built out.
“This is a hot market,” Pavich said. “People tell me they want to get away from the taxes up north.”
With more than $61 million in new construction and plans for about 5,000 new homes to be built, the Estero area is experiencing an unprecedented boom in real estate.
“We’ve gone from, ‘How are we going to live in the next six months?’ to having the best real-estate market we’ve ever had,” Pavich said. “This might sound crazy, but compared to the same time last year, we’re up 61 percent in closed sales. We’re also 60 percent over in pending sales. We’re at a 90-day supply of listings, which is extraordinarily low.”
Pavich said the hottest properties are the rapidly developing new communities along Corkscrew Road east of Interstate 75 — The Place at Corkscrew, WildBlue and Corkscrew Shores — in various stages of buildout with a combined total of 3,072 homes. Coming soon, Verdana Village is expected to add another 2,400 homes.
“A lot of places are going under $400,000,” Pavich noted.
In the luxury market, new home designs are trending toward a “coastal” look rather than Estero’s traditionally Mediterranean architecture, Pavich said.
“People spending north of $1 million are looking for something they don’t want to put money into updating. Meanwhile, there’s a lot of remodeling at places like Shadow Wood and West Bay because (residents are) happy with the location.”
For first-time homebuyers or those looking to rent, the market is tough. What could help those folks is a proposed federal tax credit. Pavich also is hearing of a new developer coming to Florida with a focus on building rentals and affordable, single-family homes.
Estero Parc apartments just finished construction west of the intersection of Estero Parkway and U.S. 41, behind the Starbucks Plaza. The Reserve has 180 apartments under construction now at the
southeast corner of Williams Road and Via Coconut. Tidewater is building out most of its residential units south of Estero Parkway and east of I-75. There also is a new subdivision of 25 single-family homes approved for Coconut Road, east of El Dorado acres.
If anything would slow construction, Pavich said, it’s logistics and supplies.
“There’s also the labor force,” he said. “And trucking companies are overwhelmed.”
It’s not all rosy
Before the global pandemic, Florida Gulf Coast University economist Amir Neto agreed with national experts’ opinions that the country was already nearing a recession.
“We were on a trend of the biggest growth in history,” Neto said. “We were getting to a tipping point. COVID brought it up earlier.”
The pandemic has halted some commercial development plans, and it continues to have a significant effect on local tourism. Total visitors were down 31.8 percent, hotel occupancy was down 13.2 percent, and the economic impact of $813 million was down by 8.8 percent in 2020 for Lee County.
This fall and winter, travel restrictions have kept Canadians from crossing the border. Some European countries also have restricted travel to and from the United States.
Experts predict it will take another year for people to feel comfortable with flying again and two years before the hospitality industry returns to normal. With these factors at play, Village of Estero and Lee County officials are working harder than ever to make the area’s economy more diverse so there isn’t such a reliance on tourism.
“If we’re able to attract different businesses, it’ll create a synergy, which will help our region have more sustainability. You’re also less susceptible to economic shocks,” said Neto, assistant professor of economics at FGCU.
To help the local tourism industry during the pandemic, marketing efforts have focused on bringing in visitors from northern Florida and Florida’s east coast. According to Lee County Convention and Tourism Bureau Director Tamara Pigott, research shows the average one-way distance consumers are willing to travel is 254 miles.
“The radius of the drive-market consumer has expanded as of late; we expect this trend to continue,” Pigott said. “Road trips, staycations and exploring your own backyard will continue to gain momentum as unsure travelers stay closer to home. Beaches and outdoor natural spaces remain among the most preferred vacations.”
Driving is the keyword because air travel has dropped. As of September 2020, year-to-date passenger traffic at Southwest Florida International Airport (RSW) was 44 percent lower than one year ago.
Lee County reported a significant decrease in tourist taxes, down by 11.5 percent one month before the close of the county’s fiscal year. Lee County’s unemployment rate has nearly doubled to 5.8 percent.
Some industries are booming
Just north of Estero, several companies have announced plans to build along Alico Road and near the airport, including Advanced Hurricane Technology and Conditioned Air.
NeoGenomics, Inc., a leading provider of cancer-focused genetic testing services, is in the process of building its $50-$60 million international headquarters near the intersection of Alico Road and Three Oaks Parkway, expected to open in 2021. The company, which has 1,500 employees worldwide, plans to create at least 295 new jobs over five years, paying an average of $59,900.
Scotlynn Group, a 10-year-old logistics company just off of Alico Road, has approximately 300 employees and does almost $90 million in revenue. Many of the employees are FGCU graduates, including Executive Vice President and co-owner Ryan Carter, recently named Florida Small Business Person of the Year.
And a research and development company that specializes in 3D printing is coming to Bonita Springs, added Talmage.
It’s only the start.
“We can foresee 45,000 to 50,000 jobs in next five-to-10 years along the Alico corridor, Treeline Road, Three Oaks Parkway and Skyplex, which is the airport,” Talmage said. “Already, every parcel from U.S. 41 to the interstate has been spoken for.”
Construction steady in Estero
New construction in 2020 added $105 million in taxable value for Estero, which is about $15 million less than in 2019. But several new developments are on the horizon for 2021.
Stock development has zoning approval for a 43-acre project on Corkscrew Road east of the Lowe’s plaza with 60,000 square feet of commercial use and 306 apartment units.
Projects in planning stages include a proposed apartment complex on the southwest corner of Corkscrew Road and Via Coconut with about 300 units.
New business construction includes Aldi, Auto Zone, Texas Roadhouse, Cube Smart and Hilton Garden Inn. The Shoppes at University Highlands just finished construction on Ben Hill Griffin Parkway north of Miromar Outlets.
There are several projects in the zoning stage. One is a 12-acre site east of Stoneybrook on the south side of Corkscrew Road near the fire station where a gas station, office and retail space, and a self-storage building are proposed.
Not all projects in Estero have pressed on, however. HCA Healthcare, which owns 100 acres north of the Hertz headquarters, has paused on building, as has Lee Health, which owns another 45 acres across the street from its new Coconut Point facility.
“We built a $140 million facility and have been watching that over the last two years. We’re supporting 85 to 90 percent of the healthcare needs (in South Lee County),” said Chris Simoneau, Lee Health’s Chief Foundation and Development Officer.
Simoneau said an outside firm has been hired and is working with focus groups to determine how best to use the 45-acre parcel.
“We identified numerous things we could have on-site like medical office space, retail, hospitality or hotel, and a potential performing arts center,” he said. “There also could be room for multi-family housing. We’d like to turn that vacant lot into a productive commercial enterprise.”
Business leaders still optimistic
FGCU economist Chris Westley said when the economy is good, Florida exceeds national numbers, and Southwest Florida exceeds state figures. Conversely, when there’s a recession, Florida does worse than the national average, and Southwest Florida does worse than the state.
The national economy already seems to have slowed in recent weeks, according to major news sources, as virus caseloads have risen. Many federal provisions to aid the economy were set to expire at the end of 2020.
Moody’s Analytics forecasts that without another stimulus, the economy will fall into a new recession early in 2021, with the national unemployment rate approaching 10 percent.
“It affects our area significantly,” said Westley, dean of Lutgert College of Business. “A lot gets spent, more in Florida than other parts of the South. A stimulus increases demand and kicks the can down the road.”
Despite the fallout from COVID-19, the majority of Lee County executives feel positive that things will get better in 2021. According to a recent survey conducted by FGCU’s Regional Economic Research Institute, 60 percent of executives said they expect conditions to improve, as opposed to 14 percent saying it’ll get worse. In addition, 95 percent of surveyed executives say they’ll either keep employment the same or have a moderate increase in employment in 2021.
By Craig Handel