Historically, South Florida has been among the strongest commercial real estate markets in the country, with continually solid returns and safety for the capital of global investors. Strong population growth, a high volume of attractive real estate, diverse cultural offerings, a travel destination for large segments of the population and a central hub for international business, especially with South America, makes it a hot investment opportunity.
With growing investment from global players in China, Canada, Germany, Singapore, Saudi Arabia, and Qatar up substantially and with the current economic conditions, there are many reasons why South Florida remains a popular place for commercial real estate investment.
Below are the top 5 reasons why South Florida is one of the best commercial real estate markets for investors:
1. Growth in the Florida Retail Market
Retail growth in Miami and South Florida has been explosive in recent years. Among the top retail markets in the country, Miami saw 5% growth in hospitality employment in 2015, reaching an all-time high in jobs in that sector. The $1.7 billion Miami Worldcenter and $1 billion Brickell City Centre are among the largest construction projects in downtown Miami. Investment continues to flow into retail and has shown no signs of letting up.
2. Business Incentives in Florida
Florida is attractive to businesses for a number of reasons. With no personal income tax, investors and entrepreneurs flock here to reduce their tax burden. According to Chief Executive Magazine, Florida is the #2 rated state for business and according to Tax Foundation, it is the #1 tax climate in the southeast, and #4 overall. For this reason, 20% of US businesses that export are located in Florida, and the state ranks 5th nationwide in high-tech employment.
3. Foreign Investment in Commercial Real Estate
As of 2015, Florida ranked fourth in the US for cross-border capital flow, as an increasing number of international investors jumped into the real estate market. The investment rate has reached a 9-year high as of 2016 with $4.3 billion in investment from outside the US flowing, up 85% from 2014. That growth has been driven by a larger number of countries as well, with new investments from Spain, Germany, UAE, and China. Latin American countries suffering from poor economic performance are investing heavily as well as they see South Florida’s Commercial real estate market as a haven for capital.
4. Commercial Real Estate in Miami Offers High Yields
Compared to other global gateway cities and existing cultural hubs in the US, I-90 corridor, and in Europe, South Florida offers comparatively higher yields on investment. Assets in Florida markets are performing strongly right now with a 10% gain in the first half of 2016. Other Florida cities like Orlando, Tampa and Jacksonville have also been targeted due to these higher relative gains.
5. Commercial Real Estate Investment Trusts
Combined with low-interest rates and a strong job market, REITs have had a major impact on the Miami commercial real estate market. A record 15.5 million people visited Miami in 2015 and the population of the city has grown by nearly 8% in the last five years to 2.7 million. The combination of this growth and institutional investment from outside developers has meant more rapid growth than would otherwise be possible, and consistent interest in the region.
Commercial real estate in Florida and South Florida have been strong, consistently performing investments for both domestic and global investors, and continue to generate capital growth as the area grows and flourishes. Whether evaluating Florida NNN properties for sale or other commercial investment opportunities, there has never been a better time for commercial real estate investments in Florida.
South Florida Commercial Real Estate Resources
There are a number of factors that contribute to the health of the commercial real estate market in the region. Below are some important sources of information if you are looking to further investigate the CRE market in South Florida:
- MMG Retail News: The MMG blog features key industry news and market updates about South Florida commercial real estate, with a specific focus on retail trends.
- Colliers’ Market Research: Colliers International is a global industry leader in both residential and commercial real estate. Their South Florida branch opened in 1990 and focuses on the tri-county region of Miami, Ft Lauderdale, and West Palm Beach.
- LoopNet: LoopNet operates the largest listing service for South Florida commercial real estate and other markets in the U.S. and Canada. Many brokers, property owners and other commercial real estate investors utilize LoopNet for selling and buying commercial real estate online.
- CoStar: Founded in 1987, CoStar pledges to create efficiency and transparency in commercial real estate. It’s the first company to offer real estate firms comprehensive, objective, and reliable information.
- The Real Deal: The Real Deal provides the latest real estate news and press releases. Their company focuses on three main regions: Miami, New York, and Los Angeles.
- Business Journal: The Business Journal is nationwide, and has the latest breaking business news for major regions across the United States, including South Florida. Their news section is updated around the clock for all major markets.
- BisNow: In their own words, BisNow is “intensely curious about commercial real estate” and they are “here to help you be curious (and nerd out) about real estate.” They not only publish news, but also produce hundreds of CRE conferences.