The Jim Garinger Team

BY DON MANLEY
dmanley@news-press.com

It was just a few years ago that construction was king and dreams took on king-size proportions.

The building frenzy included high-profile residential and commercial developments in all corners of Lee County. But some of these projects fell prey to the upheaval caused by the downward economic slide that began after the 2005 peak.

In some cases, the site has been cleared but nothing more has been done. In others a good deal of work was completed before the market soured. Some commercial developments have been built, but remain unoccupied.

Regardless of their state, these sometimes high-profile projects all represent dreams deferred…

…On the commercial side, building continued as the slowdown deepened and demand slowed – a trend fueled, in part, by developers trying to beat the June 30, 2007, deadline for the tripling of the county’s commercial impact fees.

Those developers also based their decisions on anticipated demand generated by the homes that were being built, said Jim Garinger of Fort Myers commercial real estate firm Colliers Arnold Southwest Florida.

But the commercial market should stabilize once the surplus of available homes is absorbed and those homes are occupied, Garinger added…

…Regardless of the reason, no section of Lee County is without unbuilt, partially built or unoccupied developments. Here’s a brief look at 10 high-profile projects around Lee County:

• Pinewood Lakes: A 20-acre, Cape Coral community located just north of the Hunter’s Run executive golf course. It was to contain 58, 70-foot-wide lots with single-family homes and a zoning classification that permitted full-size recreational motor homes and large boats to be stored in garages. It was never built and the land has been reclaimed by the lender, Reliance Bank from the developer Realty Partners & Co. of Cape Coral.
• Shadow Lakes: An 80-acre development, located off Bell Boulevard in Lehigh Acres where 280 single-family homes were planned. The developer, Minnesota-based M.W. Johnson Construction, has exited the market. Only about 15 homes were built. Local real estate experts were unsure of who owns the property now.
• Terra Vista: Located off Broadway Avenue in Estero, it was designed for 167 single-family and condominium homes the developer, Chicago-based Kimball Hill Homes. About half of the homes were built before the downturn occurred. Kimball Hill has pulled out of Florida and has filed for Chapter 11 bankruptcy.
• Concordia: A Cape Coral development, located at Del Prado Boulevard and Kismet Parkway, where 340 condominium homes were planned. Florida Community Bank took control of the property from the original developer and the project is now owned by Concordia Cape Coral II, LLC. There are 250 homes in various stages of completion, including 170 released for sale, with 90 yet to be built. The remaining homes will be completed once buyers are found.
• Serengeti: Located on North River Road in Alva, the development is owned by John and Valerie Thivierge, who live nearby. It’s a 31-acre riverfront tract containing lots ranging from one to 1.25 acres, all with access to the Caloosahatchee River. Just two homes have been built on the 12 lots that were purchased there. Another 14 lots are available and Valerie Thivierge said she and her husband are awaiting the market’s rebound.
• La Vita: Orchid Isles Corp., based in Aventura, had planned a 16-building, high-rise condominium complex for a 19-acre site at the corner of Colonial Boulevard and Metro Parkway in Fort Myers. Each of the 475 homes was to have a view of the water, provided by the man-made lake that was part of the plans. The site has been cleared, but never built upon. The property is now on the market for commercial uses, after a zoning change.
• Jaguar Rampage Business Center: A three-building commercial complex was planned for a roughly five-acre site on Metro Parkway, just south of Colonial. Plans had called for a 6,000-square-foot building facing Metro, a 43,000-square-foot two-story building to its rear, and a 13,000-square-foot building running perpendicular to Metro. The land owner, Luann Workman Collins, tabled those plans in late 2007 because of the slumping economy. Collins said last week that she has also tabled plans to sell the land and is now awaiting the market’s rebound because she believes the future is bright for that section of Metro.
• Harbour Plaza: It’s a 45,490-square-foot shopping center located off U.S. 41, one mile south of Gladiolus Drive that has yet to land any occupants. Construction didn’t begin until the end of 2007 and the complex was ready for occupancy in the third quarter of 2008. The owner, Hank Porterfield, said he proceeded with the project because he felt there was a lack of upscale retail space nearby. He’s dropped lease rates from $25 a square foot to $18 a square foot, with incentives, to attract tenants. Porterfield said Harbour Plaza has begun attracting serious interest from prospective tenants.
• Coconut Crossing: J.E.D. of Southwest Florida has cleared 33 acres for the Coconut Crossing shopping center, located at the northwest corner of Coconut Road and U.S. 41. However construction has not begun there. The company didn’t return calls for more information on the project and its timetable.
• Metro Commons: Plans had called for a 16-building office complex on the east side of Metro Parkway, not far from its intersection with Six Mile Cypress Parkway. If those plans had come to fruition, half of those buildings would be complete, with work slated to end in the spring of 2010. Instead nothing has been built. A redesign is being considered that could see the bulk of the roughly 8.2-acre site dedicated to a senior assisted living facility, with a portion retained for medical-office space.

The News-Press Business
Wednesday, March 25, 2009

Market pulse checked in Bonita, Estero OK, expert says
by Christina Cepero
ccepero@news-press.com

Housing economist Brad Hunter started his presentation at Tuesday’s fourth annual Bonita/Estero Market Pulse with a parental warning. Because of the market conditions, Hunter alerted the 190 in attendance about F-words in his presentation: fear, financing and falling home prices. Those things are the barriers to selling empty homes and lots, he told the group, which included developers, mortgage brokers and real estate agents. Hunter, director of housing database Metrostudy’s South Florida division; Michael Timmerman, an economic consultant with Fishkind & Associates; and Jim Garinger, a principal and managing director at Colliers Arnold commercial real estate firm, made presentations with one overarching theme — Bonita Springs and Estero are not as bad off as the rest of Lee County.

Joe Pavich, owner of Realty World in Estero and president of the Bonita Springs-Estero Association of Realtors, which organized the event with the Bonita Springs Area Chamber of Commerce, left with a renewed confidence. “We’ve been in this area for 20 years,” Pavich said. “We’re happy to be here. We’re not going anywhere. We’re just going to wait it out.” Timmerman said Bonita Springs/Estero was not as overbuilt as Lehigh Acres, Cape Coral and the State Road 80 corridor. He expects the worldwide recession, which he said started in December 2005, is the worst since 1975 and the largest since the end of World War II, to bottom out in 2010. “The bottom is not like a martini glass where it’s down and back up again. The bottom is like a dinner plate,” Timmerman said. He said between 2001 and 2006 the Bonita/Estero area was driven by Florida Gulf Coast University on Ben Hill Griffin Parkway, industrial development on Alico Road and the opening of Southwest Florida International Airport’s larger terminal off Treeline Avenue in fall 2005. Timmerman added that the area will benefit economically from the Boston Red Sox new spring training complex to be built in south Lee County. “We’re suffering like everyone else, but we’re in a better portion of the marketplace,” Timmerman said.

Commercial real estate expert Garinger said retail has remained strong at Coconut Point, Gulf Coast Town Center and Miromar Outlets. “There’s some work to do in the office market here. I think there’s some office space that needs to absorb,” Garinger said. He described the commercial real estate cycle as one of recovery in 2001-02 with low vacancy rates and little construction, expansion after mid-2003 with very low vacancies, national retailers coming in and job growth, hypersupply around 2005 and 2006 where supply exceeded demand and today’s recession.

Hunter predicts another wave of foreclosures and that housing prices will continue to decline into the first half of 2010. Nevertheless, he said the price of a house a consumer wants to buy may not be down 10-15 percent like the average. “If somebody is actually buying a house to live in it instead of flip it, it’s actually a good time to buy,” Hunter said. “I always say only monkeys pick their bottoms. It really is an outstanding time to buy a house.” Marian Rosencrans, an employee at Stewart Title in Bonita Springs, left the event at Three Oaks Banquet & Conference Center in Estero with a positive feeling about the Bonita-Estero market. “We have so much to offer here. The word needs to get up North,” she said about attracting retirees from states such as New York and Ohio.

Fort Myers, Fla. – RealFacts, a Novato, Calif. based data company, recently named Southwest Florida first in apartment occupancy growth in the state for complexes with more than 100 units.

“There are several reasons why apartments are seeing this increased demand,” said Jim Garinger, CCIM, SIOR, principal and managing director of Colliers Arnold in Fort Myers, Fla. “The primary reason is the high number of foreclosures. When a home is lost to foreclosure the owner doesn’t typically become homeless; they manage to find another roof to live under.”  

In 2007 and 2008, renters could find a nice house with a backyard for less than advertised apartment rents. However, the owner of the house from whom they were renting may have had troubles of their own. The low rent was not enough to cover the mortgage, which was based on the inflated value they borrowed against. The tenant is suddenly surprised to hear they have just a few days before they have to move out of a foreclosed property.

“Since the tenants are tired of being kicked out of foreclosed homes, they return to apartments which they view as a more tried and true approach to renting,” said Andrew Falde, CCIM, investment specialist with Colliers Arnold. Considering Lee County, Fla. has been at or near the top position in foreclosures in the United States during much of the past six months, it is likely this increased demand of renters looking for dependable housing will continue.

Park Crest at the Lakes, a 360-unit apartment complex located just off Daniels Parkway in Fort Myers, Fla., recently achieved 100% occupancy according to according to the leasing office “It took approximately four and a half months to get from 70% occupancy to 100%.”  “Stronger demand is causing apartment units to fill up and we anticipate rents will slowly begin to follow,” said Garinger. The oversupply of Southwest Florida homes that built up from 2005 to 2008 has been selling off in high volume.

According to Garinger, some of these houses may come back on the market to compete as affordable rentals, “however, our team expects the spread in rents between Southwest Florida houses and apartments to stabilize during 2009.”

With the major impact a foreclosure makes on ones personal credit, foreclosed homeowners will not be able to obtain a mortgage for many years. “As a result, we expect apartments to see sustainable demand for the next five to seven years,” said Falde. “We believe multi-family investors should return to acquisition mode during 2009. Their focus should be on buying properties based on the current low income levels and to add value by increasing occupancy, not just by waiting on inflation.”
 
Most properties are being financed using assumable debt. According to Dr. Randy I. Anderson, professor of economics at the University of Central Florida, around 50% of transactions are being financed this way. A distant second for transaction funding is international banks, followed by national banks and insurance companies.
 
Sellers in disposition mode should review their loans, talk to their lender, and fully understand the terms and conditions required to assign their mortgage. All this should be done prior to marketing the property, as it will be a key point in attracting buyers.

Clearwater, FL (March 17, 2009) – Cortland Realty Partners IV, LLC recently purchased the Vogue Apartments, an 84-unit lender owned apartment complex located in Fort Myers, Florida from Wells Fargo Bank C/O Sovereign Bank.  Colliers Arnold agents John W. Stone, CCIM, and Jason Stanton, CCIM, in Clearwater, Florida along with Jim Garinger, CCIM, SIOR, and Andrew Falde, CCIM, from the Fort Myers office facilitated the marketing and disposition of the property.  During the marketing period the property was less than 40% occupied and in need of significant renovations.  Colliers Arnold successfully negotiated the transaction which closed on March 3, 2009 for $1,500,000 representing $17,857 per unit.

Foreclosures explain sudden popularity here
By DICK HOGAN • dhogan@news-press.com • January 22, 2009

Apartment complex occupancy grew faster in Southwest Florida than anywhere else in the state in the fourth quarter even as average rents fell – but experts said that’s because people lost their homes to foreclosure in record numbers.

RealFacts, a Novato, Calif.-based data company, released statistics Wednesday showing that the average occupancy rate for complexes with 100 or more apartments increased 5.7 percent in the Cape Coral-Fort Myers area and 7.5 percent in Naples-Marco Island compared to September.

That made Naples first and Cape Coral-Fort Myers second among 16 metro areas in Florida.

“One of the factors might be people who are moving out of houses that the banks are ending up with,” said Jim Garinger, a commercial real estate agent with Colliers Arnold Southwest Florida who tracks the multi-family rental market. “People are losing houses and they still have to live somewhere.”

With a lot of people in reduced financial circumstances, the rent declines are “a function of the market seeking equilibrium in terms of rates,” he said.

On average, more than 2,100 foreclosure filings a month in 2008 have saturated the real estate market, with existing homes at fire-sale prices. There’s a backlog of about 30,000 properties in the foreclosure process.

The occupancy rate was 92.8 percent in Naples and 85 percent in Cape Coral-Fort Myers, according to RealFacts.

Meanwhile, average rents declined 13.5 percent in Naples-Marco Island to $795, making it 15th in rent increase, while in Cape Coral-Fort Myers the average rent declined 4.1 percent to $884, putting that market in 13th place.

Nationally, rents and occupancy declined almost everywhere, according to the study.

Caroline Latham, owner of RealFacts, said the combination of rising occupancy and falling rents isn’t the typical situation.

“It’s an unusual combination,” she said. “What we saw mainly around the country was rents down a little, occupancy down a little.”

A pattern similar to Southwest Florida’s occurred in Houston because of the battering that city received from Hurricane Ike in September, Latham said.

Extensive damage from the storm discouraged people from moving there, so average rents went down in response, she said.

In Lee County the glut of unsold apartments and condominiums has discouraged new construction of major apartment complexes and none are planned, Garinger said.

Safe-Start, Inc. purchased the industrial building at 2081 Beacon Manor Dr. in Fort Myers, FL from Barton-Georgia Corp. for $1.2 million or about $59 per square foot. The 20,200-square-foot warehouse was built in 1974 in the South Fort Myers/San Carlos submarket. Jim Garinger and Andrew Falde of Colliers Arnold represented the buyer. Ryan Leffler of Leffler & Associates, Inc. represented the seller.

Bateman Property Investment LLC purchased a 2.06 acre parcel of industrial land at 3260 Cargo St., Fort Myers from V V Ventures LLC for $525,000. Jim Garinger and Andrew Falde represented the buyer. Pam Van Vleck of VIP Commercial-TCN Worldwide represented the seller.

Peter Kitzerow of SFR Wealth Management Inc. (Suncoast Financial Resources) purchased a 1,500-square-foot office condo in Goldstar Cypress Preserve at 4991 Winkler Ave., Fort Myers, from David Samadneja of Dynasty Builders for $390,000. Jim Garinger and Andrew Falde of Colliers Arnold represented the buyer. Karen Johnson-Crowther of Colliers Arnold represented the seller.

By Dick Hogan
Originally posted on July 19, 2007

Occupancy rates in Fort Myers’ big apartment complexes plunged 10.9 percent in the second quarter while rents edged up, according to a report released Wednesday by Novato, Calif.-based RealFacts. Rental complexes with 100 or more units — with a total of 4,249 apartments — were at 87.6 percent occupancy, down 10.9 percent from a year earlier, according to RealFacts, which provides data and analysis to the multifamily residential industry.

Meanwhile, the average rent for all units in the city rose 4.6 percent to $933 a month in the same period. For example, a three-bedroom, two-bath apartment averaged $1,178 in the second quarter of 2006 but went up to $1,209 in the second quarter of 2007 — a 2.6 percent increase. Jim Garinger of Colliers Arnold Southwest Florida, a real estate agent who follows the multifamily market, said occupancy rates in the big complexes dropped because of competition from other sources, including the conversion of apartments to condominiums.

“The amount of condo conversions that’s happened in the last two years has had a big impact,” he said. “Those units were pulled off initially as condominiums but now we see them coming back on and being rented. “That in combination with the regular condo products that were sold pre-construction and they were either sold to someone who’s renting them out or the developer decided to rent them.”

Apartment complexes also are competing with single-family homes that were built by speculators who weren’t able to sell at a profit, Garinger said. “You can rent a single-family, three-bedroom home in south Lee County for $1,800 a month.”

The underlying trend for the industry is still healthy, however, he said. “The absorption rate is still high. In terms of market conditions, we’re still just dealing with that excess of inventory.”

Double M Ventures LLC purchased a 1,498-square-foot industrial warehouse condo in Sunset Plaza Annex at
10821 Sunset Plaza Circle, Fort Myers, from Nicholas Ruland and Milton Maxwell for $225,000.
Jim Garinger, CCIM, and Andrew Falde of Colliers Arnold negotiated the transaction.

Barnum Fort Myers Properties LLC purchased 3.9 acres in Southwest International Commerce Park, Fort Myers, from Jenisa Investments LLC for $1,984,774. Jim Garinger, CCIM, and Andrew Falde of Colliers Arnold represented the buyer. Bob Johnston and Jerry Messonnier of CB Richard Ellis represented the seller.