When it comes to the Florida commercial real estate market, the conversation typically gravitates toward the larger metro areas. However, for those of us on the ground, it’s clear that Southwest Florida is becoming a key player in the state, particularly for industrial users.
By nearly every measurable standard — population growth, job creation and infrastructure investment — Southwest Florida continues to outperform much of the United States. Industrial users and investors have taken notice, and so far in 2026, leasing activity has already outpaced all quarters in 2025.
According to the latest Colliers market report, the market has absorbed 115,777 square feet of flex and industrial space in the first quarter alone, compared to fourth-quarter 2025 which saw (-189,303 square feet) of negative absorption.
This is due to pent-up demand from users taking a cautious “wait-and-see” approach last year. And while the factors preventing them from making decisions in 2025 still exist, the sheer necessity of a physical presence in the area has finally outweighed the perceived risks.
‘Supply reset’
On paper, the data might give pause. Overall vacancy in Southwest Florida rose to 9.7 percent in first-quarter 2026, a sharp departure from the 7.2 percent we saw just one year prior. However, looking at the numbers without context misses the underlying strength of the market.
This uptick isn’t the result of a fundamental drop in demand. Rather, it is the natural digestion of a massive development boom. Over the last several years, the region has experienced an unprecedented influx of residents, accelerated by the pandemic, which necessitated a rapid expansion of last-mile delivery infrastructure. In 2025, roughly 2.4 million square feet of industrial space hit the market in Southwest Florida. An additional 145,580 square feet was completed in first-quarter 2026.
What we are seeing now is a performance separation. While older, second-generation assets may linger, modern Class A facilities continue to command premium pricing. Despite the vacancy rise, average asking triple-net lease rates increased, reaching $14.17 per square foot for the total market, with flex space soaring to $16.50 per square foot.
Small-bay crisis
Perhaps the most interesting trend for Southwest Florida’s industrial market is the pivot toward small-bay and flex industrial space. For several years, the market was flooded with inventory for big-box distribution users, leaving a massive void for local and regional businesses requiring 2,000 to 20,000 square feet. Now, developers are actively addressing this through projects like The Hub at Daniels in Fort Myers, a 160,920-square-foot, five-building industrial park catering to smaller users that broke ground in March 2026.
This project is specifically designed for the user currently operating out of a decades-old facility that needs the efficiency and visibility of modern construction. Building 500, which offers units starting at 2,010 square feet, is already seeing significant interest because pent-up demand is now translating into signed leases.
Similarly, the completion of Building 7A at Premier Airport Park is also addressing this demand. By delivering five Class A units ranging from 15,000 to 23,000 square feet, developers tapped into a segment of the market that had been overlooked during the big-box boom.
Fort Myers
When discussing Southwest Florida, it’s important to note that Fort Myers has emerged as the undisputed industrial powerhouse of the region. Fort Myers is home to nearly 30 million square feet of the region’s 49.6 million-square-foot inventory, and investor confidence in this submarket remains sky-high.
A prime example is the recent $30 million sale ($156 per square foot) of the 218,000-square-foot Baker Distribution facility. This transaction underscores a critical reality: investment capital is seeking a home in markets with sustainable growth metrics.
An investor’s haven
For the outside investor, Southwest Florida remains a haven for development. Unlike some regions where sprawling plains allow for endless industrial sprawl, our geography and land-use regulations create high barriers to entry. Scarcity of land acts as a natural safeguard against long-term oversupply.
While we are currently seeing a swell of new inventory, the difficulty of bringing new projects to fruition ensures that the market will not remain oversupplied for long.
The road ahead
What we are seeing in Southwest Florida is a strong industrial market with high demand from national and regional users. The wait-and-see period is officially over. Occupiers have realized that waiting for a perfect economic environment means missing out on the best locations and the most efficient buildings.
Based on the first quarter of this year, we’re optimistic that 2026 will prove to be a standout year for the Southwest Florida industrial market.
— By Dan Miller, executive vice president of industrial and land services, Colliers. This article was originally published in the May 2026 issue of Southeast Real Estate Business.