Southwest Florida Industrial Market Adjusts as Large-Format Vacancy Rises

FORT MYERS, Fla., March 30, 2026 /PRNewswire/ -- The Southwest Florida industrial market is entering a period of recalibration following several years of accelerated development, according to a new market commentary released by Mayhugh Commercial Advisors.

Over the past six years, the region has experienced a significant increase in industrial construction, largely driven by large-scale, dock-high distribution facilities. During the post-COVID surge from 2021 through early 2023, tenant demand kept pace, with users routinely leasing spaces exceeding 50,000 square feet.
However, market dynamics began to shift in 2024.

Tenant demand has since moved toward smaller, more functional spaces, with the majority of current activity concentrated in the 5,000 to 15,000 square foot range. As a result, larger industrial buildings—particularly those designed with ±25,000 square foot bays—are experiencing longer lease-up timelines.

Current vacancy rates sit at approximately 8.9%, following nearly 1.7 million square feet of new deliveries over the past 12 months. Notably, much of this vacancy is concentrated in newly constructed, speculative developments, while smaller and older industrial properties remain comparatively tight.

"This is not a demand issue—it's a product mismatch," said Chase Mayhugh, SIOR, CCIM at Mayhugh Commercial Advisors. "The market has shifted toward flexibility and functionality, and a large portion of the recently delivered inventory was designed for a different phase of demand."

The report characterizes current conditions as a "development hangover," with an influx of modern space creating increased competition among landlords. However, there are clear signs of stabilization.

Development activity has slowed significantly, which is expected to ease supply pressure and allow demand to absorb existing inventory over time.

Despite near-term challenges in large-format industrial space, the long-term outlook for Southwest Florida remains strong. Continued population growth, strategic location advantages, and sustained demand for logistics and distribution facilities continue to attract both users and institutional investors.

"While larger buildings may take longer to lease in the current environment, this is a temporary phase—not a structural concern," added Mayhugh. "The market is already correcting, and fundamentals remain firmly intact."

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

SOURCE Mayhugh Commercial Advisors