In the Know: Hoffmann expansion in Lee; new Sprouts, rising cost of typical Collier home
Phil Fernandez
Lee County Commission Chairman Cecil Pendergrass is among those who have lobbied for serial Naples entrepreneur David Hoffmann to invest more in his community.
And it appears he and others will get their wish.
"The growth there is incredible," said Hoffmann, who has been primarily focused on Collier including Fifth Avenue South. "We plan to expand in Lee."
And that's significant, considering his track record with his Hoffmann Family of Companies that he primarily leads with his wife, Jerrilyn, and sons, Geoff and Greg.
"We came here five years ago — Jerri and myself. Fell in love with Naples, and today, we have 2,300 employees, 30 operating companies," Hoffmann said. "It's been a heck of a journey."
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Not that he's done with Naples: We first reported last week on four more new contracts for downtown buildings.
Hoffmann said he hears concerns that "downtown Fifth Avenue is too busy. I say, 'That's not how we look at it.' We kind of look at it from a different lens. We think that if downtowns don't thrive, residential real estate doesn't thrive. Eventually, the community doesn't thrive.
"When we came to Naples, it was certainly vibrant, but it had such a disjointed ownership structure on the downtown section, and most of those people didn't live in the United States, and rarely visited here, the buildings. And that showed in their appearance and in their upkeep. So we tried to freshen that up."
Hoffmann puts a lot of emphasis on the latter, focusing on "the cleanliness, the neatness, the tidiness of the building's physical assets. We do put our name on the buildings in town. We do that intentionally. We want people to know that we own that property, that we're proud of that property, we're proud of the community and we're going to maintain it to a high standard."
He's already made at least a couple of big splashes in Lee.
"We obviously own Hertz Arena, and we just bought Old Corkscrew" Golf Club in Estero, said Hoffman, whose strategy up to now has been to "never sell" and invest for the long haul. "We buy local businesses that are serving the community."
Hoffmann toasts FGCU with $250K
Education is part of his passion as well, having spoke just over a week ago during the Resnick-Wynn family business conference at Florida Gulf Coast University.
Then on Wednesday afternoon, his firm donated $250,000 to the FGCU School of Resort & Hospitality Management to launch the Hoffmann Family of Companies Wine Laboratory. The school features learning environments including a food production and restaurant laboratory, a wine and food tasting laboratory and a ballroom event management laboratory.
As we previously reported, Hoffmann has a lot of experience in the grape industry, having poured millions of dollars into vineyards, wineries and nurseries.
Hoffmann, who concedes that he isn't the most technically savvy guy, said he works more toward his strengths than, for example, possibilities one might find in Silicon Valley.
"We've stayed away from that kind of investing," said Hoffmann, not that his companies avoid technology in what they do, and are, in fact, making new advancements. "We own a medical manufacturing company that makes hospital beds and nursing home beds. If you've ever been in a hospital, they hook you up to the blood pressure machine. Our beds are all tied to that."
Noa Medical Industries, acquired last year, has been helping develop equipment that he said will make "obsolete" those late-night visits from medical staff to take readings from patients that interrupt sleep: "They won't be waking you up anymore."
That kind of progress in an organization excites him, and he said his investments aren't always about the bottom line.
"We buy small companies, and we buy big companies. It is certainly about the money to some extent, but I think in most cases, it's more about the journey. You can make a lot of money on that journey," Hoffmann said. "I don't think money is necessarily the route to happiness. I mean that sincerely. It's just been fun."
His path emerged from humble Midwest beginnings.
"I was incredibly happy — our first house was a trailer," Hoffmann said. "I was happy then, and I'm happy now."
Latest data: House prices keep soaring
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The median home prices keep soaring in Southwest Florida.
We've reported in recent weeks how the region keeps moving up the list of the most expensive housing in America.
That trend continues to be reflected in the newest numbers from various Realtor organizations.
In Collier County, you now need $150,000 more than you did a year ago to purchase a typical home, based on Naples Area Board of Realtors findings. The NABOR overall median in January 2022: $549,000, a stunning 39% increase over last year's first month. The single-family median: $675,000.
“I don’t know if we’ll see another 39% increase in median closed price year over year this year,” said Dominic Pallini, broker at Vanderbilt Realty. “But we’re in a unique area of the world where buyers are willing to pay to be here.”
And they're willing to open their wallets wide.
“Cash sales exceeded 63% in January, which is a good sign and proof that there is plenty of equity in the market,” said Adam Vellano, a Naples sales manager at Compass Florida. “Buyer demand has not slowed down, and we’re seeing a rise in multiple offer situations as well as homes selling for above list price.”
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Sellers aren't messing around.
“I know a buyer who didn’t make the deposit on time, and the seller cancelled the contract and took a back-up offer for $40,000 more,” Vellano said. "Buyer demand is not likely to slow down anytime soon."
And that goes for condos, too, which saw a 47.2% increase in median closed price in January to $427,000 from $290,132 a year earlier.
"If you’re a buyer, don’t expect to negotiate price in this tight market," said Molly Lane, senior vice president at William Raveis Real Estate. "Homes are being sold at full price or above list price, and often without contingencies."
Despite escalating prices and NABOR's inventory down 75% from a year ago, the demand continues, with out of state buyers often in better position to outbid local residents. Many are from states that pay considerably more toward salary and retirement than Florida, which based on approve.com's analysis of federal data has also been losing ground to other areas under governors Rick Scott and Ron DeSantis.
In the past decade, Michigan, North Carolina, Illinois, Colorado and even the two Dakotas are among 26 states with bigger wage increases. Residents of the state of Washington bring in double that of Florida, and Massachusetts, California, New York, New Jersey and Connecticut all make $20,000 to $30,000 more annually.
Florida is one of eight states that doesn't have a state income tax, which often makes it attractive to newcomers.
Newcomers make up a lot of the 19,277 more NABOR showings during January than there were in December.
“Low inventory does not mean there are not opportunities for buyers in 2022,” said Ryan Bleggi, NABOR president and managing broker for John R Wood Properties.
Lee County dwellings up about 30%
Fort Myers-based Royal Palm Coast Realtor Association and the Florida Gulf Coast Multiple Listing Service are showing similar data in Lee County.
The typical sale price for a single-family jumped 27.5% to $415,000 in January compared to a year ago, while condominiums and townhomes increased 30.9% to $294,500.
In the new fourth quarter data that we wrote about in February from the National Association of Realtors, the Lee single-family median was $380,000, a 22% jump from a year ago. Its ranking nationally had been in the mid-50s in the third quarter, and moved into the mid-40s with NAR's newest figures. Collier County landed a historic ninth in the nation with $685,000, the most expensive metro to buy a house east of Colorado.
The challenge for homebuyers continued to grow in January, as the Fort Myers-Cape Coral market as well saw an inventory decrease of 74.9% for all property types in Lee versus a year ago. There were 1,593 homes overall in January, compared to the previous 6,348.
The pandemic and the desire for wider open spaces helped accelerate a migration to Florida from the tight living quarters of big cities. Investors also have been scooping up properties.
Brokers have been anticipating a little bit of a Southwest Florida sales slowdown. Part of that is tied to a lack of available quality housing from the drained inventory and a residential construction industry stymied by a supply chain that first started getting clogged well prior to the COVID era. At the same time, New Yorkers have begun moving back to the Big Apple in droves.
For the Bonita Springs-Estero Board of Realtors, also known as BER, the lack of local choices has meant sharply declining sales. After a peak of 605 transactions in April, the freefall has dropped them to 247 in January, about a third less than a year ago.
And what's there continues to go fast. Homes have been selling in five to six days since May.
Like other areas, the median overall has shot up after staying generally flat to start 2021. Almost identical to a year ago, the median sat at $352,000 in April. And now in January? $489,000.
New Wally World, Sprouts for the Cape
Got a "Hey Phil" from Lee County reader James Jarrett this past week, as he looked out from his pretty waterfront perch, just a few feet away via motorized vessel from the Caloosahatchee River and Bernice Braden Park. A shout out to the subscribing crew at Clipper Bay condos.
"Really enjoy your column though would like to see more about Cape Coral. Lots happening here," Double J told me.
No question about that, JJ. So much that it will take much more than one column to hit a lot of it. So today, let's focus on a couple or so enterprises shoppers have been wondering about in the popping Pine Island Road corridor.
For most of the past decade, a super Walmart has been talked about for Pine Island Road, near Southwest 20th Avenue. That's pretty much across from Bubba's Roadhouse & Saloon, where many a fajita has been consumed on a Tuesday night in this here 21st century.
Construction is finally scheduled to begin on Wally World over the summer, with completion about a year later, according to public records.
And it'll be a doozy: 202,000 square feet. The typical center is about 187,000, with the nation's largest as of last year in Albany, New York at 259,650.
While there have been nearer options of the Walmart Neighborhood Markets, your choice of its big dog spots has been about 20 minutes away from this locale to Del Prado Boulevard or North Fort Myers or just a bit longer to Punta Gorda's.
Shortly after work begins there, a mixed use town center project launches across the street and just about adjacent to Bubba's and the German-American Club land. The 131 acres are scheduled to feature multi-family housing, plus medical, shops, restaurants and a public entertainment area.
Plans for other similar retail plazas and medical facilities up and down 10 miles of Pine Island Road from Burnt Store Road to North Fort Myers are also under consideration and have been promoted by developers.
That corridor is scheduled to get another major grocery chain in the form of Sprouts Farmers Market.
It signed a lease to occupy 24,450 square feet where the old Staples had been at 1780 NE Pine Island Road, next to Burlington in the Coral Walk Shopping Center, city officials say. That'll be a lot shorter ride than the one Cape residents have had to take to Estero if they had a hankering for its popular chicken that I reported last month ranks second among grocery outlets.
While it hasn't announced an opening time, Sprout's is hustling, having already posted a store manager job.
We had first reported in January on a location slated for College Plaza, near Florida SouthWestern State College. Last time we checked, no start date had been determined.
Based at the Naples Daily News, Columnist Phil Fernandez (pfernandez@gannett.com) writes In the Know as part of the USA TODAY NETWORK. Support Democracy and subscribe to a newspaper.