Lakewood Ranch's commercial retainer
LAKEWOOD RANCH - Kirk Boylston is surrounded by growth.
From his Lakewood Ranch office, the new head of commercial development for a subsidiary of ranch developer Schroeder-Manatee Ranch Inc. (SMR) can consider expansions planned to both the north and south.
If they reach fruition, they would double the number of residents and businesses in the master planned community over the next decade.
Just across Interstate 75 and outside the ranch, Benderson Development Co. is constructing with a partner an 880,000-square-foot shopping mall. There's also millions of square feet of office and retail space recently completed or planned nearby along University Parkway.
That space is in addition to the 2.3 million square feet of existing commercial real estate in Lakewood Ranch that Boylston is charged with keeping occupied and desirable to tenants — despite those new additions and fierce competition.
SMR believes that Boylston, who has ties to Southwest Florida and was hired away from a commercial developer in Las Vegas, can accomplish just that.
The new chief of LWR Commercial Realty, who took over from Brian Kennelly earlier this year, has a significant leg up.
That's because Lakewood Ranch has maintained the lowest commercial real estate vacancy rate in the area for the past several years.
But Boylston knows that even with that standing, there's still plenty of work to be done. He's started by targeting a big catch.
“The downturns always tend to follow a similar pattern. This one was just longer — and worse — than typical,” Boylston said. “But now, commercial has picked up quite a bit. We are seeing a lot of demand for our property.”
A vision for growth
Boylston grew up on Siesta Key at a time when there were more trees on the barrier island than condos. He graduated from Riverview High School, attended the University of Florida and then began a career in real estate.
Boylston remembers Lakewood Ranch being little more than an idea — along with thousands of acres of cattle ranchland. He admits he was somewhat surprised to see the community's profound growth upon his return to the area.
“It's impressive,” he said. “The area has grown up a lot since I left. I was actually looking to come back here for a while. This opportunity came up, and I was lucky enough to get it.”
Boylston worked for about 15 years in California, where he held various positions in development, sales and leasing for different firms, including prestigious developer Cabot, Cabot & Forbes.
Most recently, he was regional director of EJM Development Co. in Las Vegas, where he was responsible for all of the company's operations in the southern Nevada market.
There, he managed a portfolio of more than 5.5 million square feet of leased industrial, office and retail space. He also was responsible for developing the largest master-planned commercial project in Las Vegas — the 450-acre Arroyo.
While Lakewood Ranch is a vastly different market than Las Vegas, where the commercial real estate market depended largely on the strength on the gaming industry, Boylston hopes to build the ranch into a destination of similar name recognition.
Smaller “mom and pop” shops have long been considered the ranch's bread and butter.
But Boylston now plans to go after different users — like biotech or pharmaceutical companies — that have been missing from Lakewood Ranch's growth.
To do that, he'll have to get Lakewood Ranch on the collective radar of site selection professionals who work for giant national companies seeking to relocate or expand.
“We think we will see some big vacancy declines in the near future,” he said. “The demand is here. It's a very long process, but we think we can do it.”
At the forefront of recovery
Commercial real estate generally lags its residential counterpart. While it often takes longer for the commercial sector to slip into economic doldrums than the housing market, it also tends to bounce back slower than home building.
That's one key reason why Lakewood Ranch has led the charge in the region's modest commercial real estate recovery. Residential homebuilding has exploded on the ranch — and those new rooftops, in turn, have driven demand for offices, retail and warehouse space, Boylston said.
As of June, Southwest Florida's 10.8 million square feet of combined office space had a 17.1 percent vacancy, down from 19.4 percent during the same time last year, according to figures compiled by the economic development committees in Sarasota and Manatee.
By contrast, Lakewood Ranch had the region's lowest vacancy in June, at 8.1 percent.
That was followed by downtown Sarasota's 12 percent, Manatee County's 18.7 percent, Sarasota County's 23.6 and downtown Bradenton's 28.4 percent, records show.
There has been 104,000 square feet of positive office absorption year to date, which also help prices to rebound and, in pockets, could soon give way to new construction.
“That's an improvement, and a good sign,” said Brian Kennelly, Boylston's predecessor at LWR Commercial Realty, who left last September to rejoin the Starling Group, a Sarasota County developer. “We are past the declines, so rates are now stabilizing.”
Signs of continued growth
Most industry watchers expect that slow and steady recovery to continue through at least the end of this year. They attribute Lakewood Ranch's success to the newness of the facilities there, the proximity to I-75 and the booming residential market.
A low purchase price for the land and the ability of SMR to control supply also has kept the region out front.
Much of the future commercial additions in Lakewood Ranch will come through expansion south, into Sarasota County, and the proposed Lakewood Centre, which is slated to be built north of State Road 70 and south of Malachite Drive, between Lakewood Ranch Boulevard and Pope Road.
Boylston, who is in his mid-50s, said Lakewood Centre will become the ranch's signature commercial corridor when its mix of retail, hotel and multifamily housing is eventually completed.
Plans call for 4,683 new residences, more than 3 million square feet of commercial and retail space, and 300 hotel rooms. The project has an estimated completion date of 2026.
SMR officials also expend pent-up demand for flex space and industrial warehouses to gain momentum, because that segment of the industry has been a bright spot for commercial development in this region.
“There's been huge interest,” said Stan Rutstein, a commercial real estate specialist with Re/Max Alliance Group.
“We have picked all of the best fruit off the tree — the cheaper bank-troubled stuff. Now, it's selective users for selective properties. I think we will continue to grow — slowly.”