The Fort Myers office building market continues to be on a tear; a second building sold for the second time in two years.
The latest sale of the 65,252-square-foot building at 2675 Winkler Ave. in Fort Myers hit a price of $8.9 million in February. That’s a 31% price increase from when it sold in January 2021 for $6.5 million.
“When we were a part of them acquiring the building in January 2021, it certainly wasn’t our intention to think we would be selling it again 13 months later,” said Adam Palmer, a broker with LandQwest who represented the seller, DKM Property Holdings LLC. “That was not the gameplan. There were two things that made it viable. We had some vacancies that were absorbed. And the yield expectations through cap rates lowered.
“When you have an increase in operating income, and the yield expectations lowered, that’s a double benefit.”
Jim Doane and George Vukobratovich of Welsh Properties Florida Inc. represented the buyer, Meadowcreek Investments LLC.
The building was 100% occupied this month. Tenants include Millennium Physician Group, U.S. Renal Care, Early Learning Coalition of Southwest Florida and GHD.
In December, Palmer helped broker the sale of Alico Center off Interstate 75 and Daniels Parkway for $6.5 million. That marked a 10.64% increase in price from 18 months earlier.
The cap rate on the Fort Myers office building that just sold lowered from just under 9% to 7.5%, Palmer said.
“When the cap rate lowers, that means the price goes up,” Palmer said. “Ultimately, the cap rate determines the value of the property. The cap rate is essentially the same as the yield. What is the percentage of return on the money? If the cap rate is 10 percent on a million-dollar property, at the end of year one, you will have netted $100,000.”
