Commercial Real Estate Developers Still Flock to Southwest Florida

Thousands of new homes in the works for land east of I-75 in Southwest Florida are providing ample opportunities not only for home builders, but for those who build schools, hospitals, churches and fire stations required to support the area.

Even with the precipitous drop in new home construction around the region, a growing list of firms are moving into the are to challenge those already in the commercial real estate market for a slice of what should ultimately prove to be a multibillion-dollar pie.

For some, the pickings at Lakewood Ranch, east of I-75 in Sarasota and Manatee County, will suit them just fine.

For others, the community’s central location between the Tampa and Naples housing market is more of the draw.

“We want to be seen as a west coast contractor rather than a Sarasota contractor,” said Michael J. Beaumier, V.P. of west coast operations for Suffolk Construction, a Boston-based company.

“With time and our resources, we believe we will become a major player in the public sector marketplace.”

Suffolk, successful in markets from West Palm Beach to Irvine, Calif., ranked No. 319 on Forbes Magazine’s list of America’s largest private companies.

The company has built more than 160 senior living centers across the U.S., and has done numerous hospitality and retail projects for major companies including Marriott, Hilton, Stop & Shop and Reebok.

Suffolk is off to a considerable start in Southwest Florida.

Working from its new Lakewood Ranch office, Suffolk has teamed with Kraft Construction in a joint venture worth $140 million to build the first phase of Ave Maria University.

The new school will encompass some 800,000 square feet of libraries, classrooms, dorms and oratories near Naples in a massive effort that is turning a tomato field into a town.

Suffolk’s 6,000-square-foot office in Lakewood Ranch is its newest in the Sunshine State, with the company’s Palm Beach operation establishing its Florida division in 1994.

While Beaumier said the company is targeting projects from Marco Island to Tampa, Suffolk’s managers are keeping their eyes open for local projects and have already set their sights on the city of Sarasota’s new police station and other public sector buildings.

But it is the appeal of individual, home-buying Florida mortgage applicants - people in need of the new homes built or planned for the region - that is drawing huge builders like Suffolk.

“They follow the rooftops,” said Jay Brady, executive director of the Gulf Coast Builders Exchange, a Sarasota-Manatee group of commercial builders, architects and engineers with 350 members.

“Everyone does some degree of research and analysis to determine where to set up shop,” Brady said. “Others are looking for a geographic hot spot between two places they serve, and Lakewood Ranch may be it.”

Lakewood Ranch is the best-known portion of Schroeder-Manatee Ranch’s 28,000-acre property that straddles Manatee and Sarasota counties.

It includes 1,500 acres of groves and 3,500 acres for vegetable farming, as well as the 5,500-acre, master-planned community and corporate park that most residents of the region are familiar with.

With 7,000 existing homes, the community is likely to keep growing with new work such as The Lake Club and several condo projects east of I-75.

Suffolk has expanded to the Sunshine State’s west coast at a time when the region is seeing explosive growth, even in the face of a slower Southwest Florida housing market.

In Sarasota County alone, the population grew from 325,957 to 369,535 from 2000 to 2006. That added almost as many people to the county as in all of the 1990s.

Companies like Suffolk bet that that population explosion will continue to charge the commercial development opportunities, so much so that there will be plenty of business not just for them but also for more established area builders such as DooleyMack and Halfacre Construction Co.

And so are other newcomers to Southwest Florida such as the Tower Group, which like Suffolk is an east coast fixture seeing dollar signs amongst Florida’s west coast housing developments.

Tower was hired to build part of Lakewood Ranch, the Professional Center at Lakewood Ranch, but then decided to stay. The company has invested $800,000 in cash to buy space in the office building it is constructing.

Founded in Miami in 1995, Tower has built schools, retail centers, office buildings, high-rise condos and even a theme park on the state’s east coast, the Parrot Jungle and Gardens on Watson Island near Coral Gables.

The company is the ninth-largest builder in Florida, with more than $200 million in annual revenues. The global Spanish developer the OHL Group acquired a majority interest in Tower last year.

Tower, like Suffolk, is focusing both inside and outside Lakewood Ranch, having already secured a $40 million deal to build the Clearwater Centre Residences & Shoppes to the north and a $7 million contract to build the Pine Island Marketplace retail shops to the south in Cape Coral.

Both Suffolk’s Beaumier and Tower’s Galmin stress that they are here to stay, and that Southwest Florida is the hottest place to be in the state. As proof, both executives point out that they have already moved their families here.

Galmin said he expects Tower’s west coast operation to eclipse its east coast division within five years, even as fewer individual homeowners are applying for Florida mortgages in that time.

“We see the opportunity to be a profitable organization, without a doubt,” Galmin said. “We are not here to put anyone out of business, but we will be aggressive and we will be knocking on our competitors’ doors.”

SOURCE: Sarasota Herald-Tribune