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Southwest Florida BUSINESS TODAY ®
AUGUST 2022
SWFL CRE, CONSTRUCTION & DEVELOPMENT A look at commercial real estate & construction updates in Southwest Florida
Can commercial real estate investors manage rising inflation? direction, from CPAs to attorneys to property management contracts. In short, everyone is paying more for employees. Smart commercial landlords’ budget for capital improvements or recurring maintenance costs, but even the savviest investor could not have predicted the sudden spike in labor costs. Real estate investors expecting to install new windows for hurricane season or to add a new roof for building maintenance are now looking at prices up 30-50% from just three years ago.
Part 1 of 2
Commercial real estate investment has long been considered a safe haven by investors. Not only has real estate investment proven safer than the stock market, income properties have also historically demonstrated greater returns. However, many commercial landlords who’ve already been absorbing the rising costs of energy and property taxes are now seeing their real income shrink due to rapid inflation. And with inflation projected to get worse before conditions improve according to firms like Goldman Sachs, commercial landlords with fixed rents are getting hit the hardest. Labor increases hit hard for commercial landlords Florida saw the third highest wage growth in the country in 2021. According to the Bureau of Labor Statistics, “The state’s workers got a collective 8.7% increase in wages from September 2020 to September 2021.” Commercial landlords, like many employers, have struggled to find qualified employees for positions they once filled easily. In turn, they’re giving raises and paying salaries up to 30% more than 24 months ago. This same dynamic is also affecting bills from their vendors with price increases coming in from every
BY PHIL FISCHLER Guest Columnist
Utility costs trend upward for commercial property investors Commercial real estate investors have been watching the cost of rising utility bills for the last several years. Most recently the Florida Public Service Commission approved a 5-year base increase in the cost of natural gas in 2021. The trend in rising energy prices has been the catalyst for Florida’s green building standards in the last decade, with upgrades focused on improved air quality, energy efficiency, and water filtra-
tion. Property owners understand that modern updates not only attract quality tenants, they also increase property value in a competitive marketplace. And although the benefits of LEED construction save commercial landlords thousands every year, many owners are delaying plans for capital improvements or implementing smaller improvements over a longer period of time. Real estate investors aren’t just dealing with rising construction costs due to inflation but significant increases in the cost of labor across the board. At Fischler Property Company, we believe that now is a great time for property owners—values are up, demand is high, and inventory is static. We’re happy to prepare a return on equity (ROE) analysis on your asset or portfolio. Interested in identifying one or two strategic moves you can make now, to put you in the best position to meet your goals over the next 10 years? Phil Fischler is the founder and president of Fischler Property Company. In 2009, Fischler founded Fischler Property Company with a mission to build a legacy through inspiring investment and restoration of Southwest Florida, while helping to positively shape its inevitable growth. Contact pjf@fischlerco.com or (239) 895-1060.
Wealth Enhancement Group joins forces with Hawkins Wealth Management Wealth Enhancement Group, an independent wealth management firm, announced it plans to acquire Hawkins Wealth Management, an independent RIA with offices in North Liberty, Iowa, and Naples. Led by founder Tim Hawkins, Hawkins Wealth Management has $574 million assets under management. This latest partnership brings Wealth Enhancement Group’s total client assets to more than $55.5 billion. Jeff Dekko, CEO of Wealth Enhancement Group, said, “Tim and Managing Partner Aaron Robertson have built a well-respected firm supporting the fi-
nancial planning, tax efficiency and retirement distribution planning needs of individuals during times of transitioning wealth. We are excited to have them, their more than 40 years of combined financial planning experience and Hawkins’ dedicated team of advisors join Wealth Enhancement Group.” Hawkins founded Hawkins Wealth Management in 2012 after working for large insurance and investment companies. The firm embraces a comprehensive analytical approach to financial planning and a low client-to-advisor ratio to help clients nearing retirement,
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selling a business or navigating other life changes. This acquisition will bring a team of six financial advisors and seven support staff to Wealth Enhancement Group and enhance the firm’s robust Midwest presence. This will be Wealth Enhancement Group’s sixth acquisition in 2022. Hawkins said, “We are passionate about creating better outcomes by simplifying the complexities of wealth and family financial planning. Joining Wealth Enhancement Group allows us to drive growth by leveraging their support services and technology offerings.”
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Jim Cahn, chief investments and business development officer of Wealth Enhancement Group said, “Hawkins Wealth Management has an exceptional history of providing tailored financial planning, investment management and retirement distribution planning services for its clients. We look forward to helping them grow their business.” Financial terms of the transaction were not disclosed. The transaction was scheduled to close on June 30, after which the practice began doing business as the Hawkins Team at Wealth Enhancement Group.
Cushman & Wakefield brokers $6.5 million sale of Fort Myers office
Centennial Bank has purchased a 20,402-squarefoot, two-story professional office building and bank located on Creekside Lane in Fort Myers. The building’s first floor is completely built out for banking services including a secure bank vault and offices. The second floor is built out for offices. The building has a great location that makes it easy to get to from Fort Myers or Cape Coral. Centennial Bank purchased this building for $6.5 million from FineMark National Bank & Trust.
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