Costco Makes 55-Acre Buy for New Store in Southwest Florida
The transaction set a record for the region, according to brokerage firm Mayhugh Commercial Advisors.
Costco Wholesale Corp. has acquired a 55-acre development site in Fort Myers, Fla., where it will build a new retail store and gas facility, paying $55 million for the property. The site also includes several outparcels that can be sold for development, including a quick-service restaurant.
The sale price, at $1 million per acre, or about $23 per square foot, set a record on a per-acre basis for a tract exceeding 25 acres in the region, according to Chase Mayhugh, president & CEO of Mayhugh Commercial Advisors. Mayhugh and his father, Chuck Mayhugh, founder & senior advisor of the Fort Myers-based firm, brokered the deal.
The sellers were Cois Family Partners LLC and Carcione Family Partners LLC. Both entities were represented by Mayhugh Commercial Advisors. The firm also brokered the partnership’s acquisition of the Southwest Florida property more than 20 years ago.
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The site, located at the signalized intersection of Colonial Boulevard and Plantation Road, has more than 1,100 feet of frontage on Colonial Boulevard and more than 3,100 feet along Plantation Road, as well as about 700 feet on Metro Parkway.
The new store will replace Costco’s location at 7171 Cypress Lake Drive and U.S. 41 in Fort Myers, about 5 miles from the newly purchased location. It is expected to be about 172,000 square feet, or roughly 20,000 square feet larger than the current store, according to Mayhugh. He said development should start within several months.
It’s not clear yet what Costco will do with the old site, but Mayhugh said it may be converted to a Costco Business Center, a warehouse designed to serve small businesses, restaurants and offices, although all members can shop there. There are currently at least 26 such stores across the U.S., including one in Southfield, Mich., where it anchors the Northland City Center.
Costco had evaluated multiple parcels across the Fort Myers market before deciding on this site because of its infrastructure and high visibility. About 70,000 vehicles pass the site daily on Colonial Boulevard.
Mayhugh said the Costco team was particularly interested in the property because it offered multiple ingress and egress points, improved traffic circulation, potential signalized access and dedicated turning lanes, as well as enhanced fueling station capacity. He added that the parking lot will be larger than the current store, with close to 1,000 parking spaces.
Owners resisted subdividing site
Costco initially was interested in buying 25 to 30 acres, but the owners would only sell the property in a single transaction. Mayhugh said they fielded numerous inquiries about the site over the years from developers looking at various uses, including strip retail centers and multifamily projects, but the two family-owned organizations held firm on their decision not to subdivide the site.
“We agreed with them that would be the best way to go,” Mayhugh said. “It’s a very unique piece of land, one of the last (large tracts) in a very densely populated area.”
Ultimately, Costco agreed to buy the property about 19 months ago and closed on the deal this week. The strategy gives the new owner unified control of the site and a cohesive, master-planned development. Mayhugh said it also maximized long-term value for both the sellers and the buyer.
Mayhugh said the firm is working with the sellers to reinvest the capital proceeds from the transaction through a 1031 exchange. He said the family partnerships were looking to invest in retail and industrial assets in Southwest Florida, including Fort Myers and Tampa.
Costco continues U.S. expansion
Costco is opening a store in Pensacola, Fla., next month. Other new locations slated to begin operations in May and June include New Braunfels, Texas; North Visalia, Calif.; Syracuse, Utah; and Chandler, Ariz., in the Arizona Business Center.
Earlier this year, MCB Real Estate secured a 162,000-square-foot commitment from Costco to anchor its $2.8 billion, mixed-use VIVA White Oak development in Silver Spring, Md. It will be Costco’s fourth location within a 10-mile radius and its 12th in Maryland.
Costco operates 924 warehouses across the globe, including 634 in the U.S. and Puerto Rico, 114 in Canada and 42 in Mexico.
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