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Florida’s Commercial Real Estate Market Continues to Grow
July 6, 2021

Florida’s Commercial Real Estate Market Continues to Grow

by The CE Shop Team

This Peninsula Paradise Is Ready for Business

After an unstable year due to the pandemic, Florida’s commercial real estate market’s future is looking bright, especially with its current economic boom. Among the nation’s recovering states, Florida is poised to make one of the strongest comebacks. South Florida's market in particular is quite literally on fire, according to experts. Investors are taking advantage of the state’s numerous attractive benefits for commercial real estate and the high volume of Sunshine State opportunities that are currently available.

2021's Commercial Real Estate Outlook 

Though retail, hotels, and office space prices declined 5-10% over the last year, industrial sectors, data/research centers (specifically related to life science), and rental properties have all increased in value. Demand has transitioned to these areas as novel remote work opportunities and increased rates of travel and tourism influence the current commercial real estate market.

According to the National Association of REALTORS®, properties or portfolios of at least $2.5 million fell 28% year-over-year in the first quarter of 2021, with declines across all commercial property types except for hotels. Across the country, commercial real estate is scraping by to make a comeback, as reopening unfolds slowly but surely.

"The top commercial real estate markets that are expected to outperform the rest of the nation are generally affordable and able to draw new residents with a greater flexibility to work from home," said NAR's Chief Economist Lawrence Yun.

Florida Commercial Real Estate Growth

Why Florida?

Florida’s commercial real estate market continues to receive substantial influxes of capital that, along with the current economic conditions, create a solid foundation for the sector’s ongoing success. The state’s population growth, diverse culture, tax-friendly laws, and strong tourism industry are all factors in Florida’s appeal to commercial investors, both nationally and internationally. While the exact amount of foreign cash being invested into Florida’s CRE is fuzzy, it's estimated that over $26 billion was invested into the U.S. CRE market in 2020, and it's projected that 2021's foreign investments will exceed this figure. Florida boasts the highest number of foreign real estate investors in the U.S., and received significant capital from Canada, South Korea, Germany, and Singapore

Unsurprisingly, then, Florida ranks as the top destination for international commercial buyers The state’s early reopening has further instilled confidence that normalcy is returning, which means business is coming back. With the sheer number of new residents (around 330,000 people) who have made the Sunshine State their home in the past year, investors foresee a host of upcoming opportunities to meet this new demand. 

Additionally, Florida is unique in that there is direct transportation access by land, sea, and air, creating a central business meeting spot. Companies from around the country are all eyeing up Florida, creating a boom in commercial and residential real estate. Most recently, Elon Musk’s The Boring Company kicked off the planning stages of creating an underground tunnel to help tackle traffic congestion. For decades, retirees were known for moving to the Sunshine State, but now tech workers and hedge funders are leaving the Bay Area, New York, and Los Angeles to enjoy Florida’s sandy shores.

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