Southwest Florida Commercial Real Estate Market Enters a "Back to Reality" Phase Heading Into 2026

FORT MYERS, Fla., Jan. 21, 2026 /PRNewswire/ -- After several years of aggressive growth and speculative underwriting, commercial real estate investors across Southwest Florida are entering 2026 with a markedly different mindset. The market has shifted away from speculation and toward disciplined, fundamentals-driven decision-making, signaling a broader reset rather than a retreat.

Over the past 12 months, investor behavior has clearly evolved. Capital remains active, but it is more selective, more cautious, and increasingly focused on long-term value creation. Stretch underwriting and growth-at-all-costs strategies have largely faded, replaced by a renewed emphasis on asset quality, tenant strength, and predictable cash flow.

A Flight to Quality
Across all major asset classes, investors are prioritizing well-located properties with stable, creditworthy tenants. Assets offering durable income and defensible fundamentals are commanding the greatest interest, while speculative plays have fallen out of favor.

Sector Trends Across Southwest Florida
Industrial and retail assets continue to attract the strongest demand, driven by necessity-based users and resilient fundamentals. Medical office and Class A office properties are seeing selective interest, particularly those that are well-leased and institutional in quality. Meanwhile, multifamily and land or development sites have cooled as investors reassess near-term demand, rising construction costs, and more conservative exit assumptions.

In Lee County, many land projects remain fully entitled and shovel-ready. However, developers have meaningfully pulled back over the past year, choosing caution over risk amid ongoing economic uncertainty.

Underwriting Discipline Returns
The post-COVID environment saw transactions underwritten on aggressive assumptions, often minimizing vacancy, tenant risk, capital expenditures, and leasing costs while projecting outsized rent growth. That cycle has come to an end.

Today's investors are once again underwriting realistic vacancy and rollover risk, tenant credit quality, capital expenditures, and leasing costs and incentives. This renewed focus on fundamentals represents a healthy and necessary correction for the market.

Outlook for 2026
While global economic uncertainty is expected to persist into 2026, opportunities remain for disciplined investors who prioritize quality, price risk appropriately, and maintain conservative assumptions. Southwest Florida's long-term fundamentals remain intact, but the market has matured.

"Back to Reality" is not a retreat. It is a reset.

For more information about Mayhugh Commercial Advisors, please visit https://mayhughcommercial.com/.

About Mayhugh Commercial Advisors
Mayhugh Commercial Advisors is a reputable full-service commercial real estate firm headquartered in Fort Myers, Florida. Established in 1975, the company boasts extensive experience and expertise in serving clients throughout Southwest Florida. Mayhugh Commercial Advisors offers a comprehensive suite of services including sales, leasing, and property management. Known for its commitment to excellence and personalized client solutions, the firm is deeply ingrained in the local market dynamics. Through ethical practices and dedication to client success, Mayhugh Commercial Advisors continues to be a trusted leader in the region's commercial real estate sector, driving growth and fostering lasting relationships within the community.

SOURCE Mayhugh Commercial Advisors