Commercial Magazine

Commercial Spotlight: Florida

The Sunshine State is a magnet for economic activity.

By Neil Pierson

From 2010 to 2020, Florida’s population grew twice as fast as the U.S. as a whole. The Sunshine State added more than 2.7 million residents during the decade, or 14.6% growth, and is now the nation’s third most populous state with 21.8 million people.

A Brookings Institution analysis of census data found that the 50 largest U.S. cities grew by 8.5% during this 10-year period. The Florida cities on this list, Jacksonville and Miami, easily exceeded this growth rate with population increases of 15.6% and 10.7%, respectively.
Florida’s major metro areas are at the forefront of the state’s growth. A report released last year by The Pew Charitable Trusts showed that Florida’s urban areas grew by 15.9% from 2010 to 2020 while rural areas grew by only 2.2%. This demographic trend was similar to the rest of the country as rural areas lost population during the decade while large cities and suburbs grew by 8%.
Apartment investors continue to pour money into the Sunshine State to keep up with housing demand — and data shows that they’re being richly rewarded. Yardi Matrix reported that Miami, Orlando and Tampa led the nation’s top 30 metros for multifamily rent growth from April 2021 to April 2022. Miami (24.6%), Orlando (24.1%) and Tampa (22.6%) were well above the U.S. average rent growth of 14.3% during this period.
Tourism is a key part of Florida’s economy and visitors have been returning in droves for a while. Statistics from the state’s official tourism board show that visitor counts were down 39.6% from 2019 to 2020, but they rebounded by 54% in 2021. In the first quarter of this year, nearly 36 million people visited Florida, exceeding the pre-pandemic level of Q1 2019.
U.S. commerce figures show that Florida recorded annualized gross domestic product growth of 7.5% in Q4 2021, eclipsing the national rate by 60 basis points. The state had filled more than 10.2 million jobs as of April 2022, a 2% increase from the pre-pandemic level of February 2020, the U.S. Bureau of Labor Statistics reported.
Florida’s three largest employment sectors are trade, transportation and utilities; professional and business services; and education and health services. Twenty-two Fortune 500 companies are based in the Sunshine State, including World Fuel Services Corp., electronics manufacturer Jabil, homebuilder Lennar Corp. and air conditioner giant Carrier Global.
Sports are a favorite pastime of Floridians and they’re also a valuable commodity. Amateur and professional sports generate annual revenues of $57.4 billion, support 580,000 jobs and attract 16 million visitors per year for the state. Florida is a top destination for golf enthusiasts with more than 1,100 courses, and its plentiful bodies of water provide 81,000 jobs for the fishing and boating industries.
Jacksonville Jaguars owner Shad Khan is leading a new downtown revitalization project for the city at a reported cost of $370 million. The Jacksonville Shipyards development includes a 12-story hotel, a six-story office complex and condominiums. Construction is expected to start this year and finish by 2025. ●
Industrial real estate in Miami-Dade County (which encompasses 1,900 square miles and includes some 2.7 million residents) has benefited recently due to strong job growth in sectors such as trade, transportation and manufacturing. Cushman & Wakefield reported that these three sectors added 12,800 jobs countywide in the year ending this past March. The county’s unemployment rate at that time was 2.9%, down 370 basis points from March 2021.
Miami’s industrial vacancy rate reached a two-decade low point of 2.3% in first-quarter 2022. Owner and tenant demand appeared insatiable as another 7.6 million square feet was under construction at that time — and three-quarters of it was considered speculative real estate. Asking rents jumped 16% during the prior 12 months and breached the $10-per-square-foot mark for the first time. Much of the new supply had an expected delivery date of six to 18 months, Cushman & Wakefield reported.
Developers finished two major projects in the first three months of 2022, the company noted. Home Depot anchors a new asset of 1 million square feet while Amazon is the main tenant for a new building of 280,000 square feet.

Focus: Agriculture

Florida’s 47,000 farms and ranches are responsible for growing a majority of the nation’s tomatoes and oranges. The Sunshine State also produces more than 25% of the bell peppers, grapefruit, watermelons and sweet corn in the U.S., according to state officials.
Floriculture (the cultivation of flowers) encompasses many types of garden and potted plants, foliage and cut flowers. U.S. Department of Agriculture statistics show that Florida led the nation in 2020 by producing $1.14 billion of the country’s $4.8 billion in floriculture crops (or 24%). Florida also has the nation’s largest turfgrass industry, with annual revenues of $7.8 billion and a workforce of 173,000 people.
Ranching and beef production has taken place in Florida since the 1500s, when famed explorer Juan Ponce de Leon arrived with a small herd of horses and cattle. The Florida Beef Council reports that the state has more than 886,000 beef cattle and 15,000 beef producers. The industry ships about 450,000 calves to other states and generates more than $500 million in cattle sales each year.

What the locals say

“They’re already in tier-three markets building multifamily (housing). … Like, for example, Miami. You go from tier-one market Brickell Avenue downtown into tier two, which would be the Midtown and Design districts. Now you’re in Opa-locka and these other tier-three areas, where people are re-permitting and redoing what the plans were for those sites to put in more multifamily. … We’re seeing the government supporting some of these bigger developers, like the Related Group, to do more (projects) in the tier-three markets that are affordable housing and giving them tax incentives. And opportunity zone stuff is all over Florida to help the housing shortage, frankly speaking.”


Michael Internoscia
M&M Private Lending Group

3 Cities to Watch

Fort Myers
Like much of southwest Florida, Fort Myers was devastated by Hurricane Irma in 2017. Irma ranks as the sixth most expensive hurricane in U.S. history at $57.5 billion in damage. The city has bounced back and grew by 6.8% during the year ending in July 2021, the sixth fastest rate in the country. Fort Myers and neighboring Cape Coral have a metro-area population of about 756,000. Lee Health, Publix Super Markets and Marriott International are among the largest local employers.
Gainesville is home of the University of Florida, which includes 53,000 students and 5,300 full-time faculty. The university attracts students from across the globe and the local economy is highly diverse. Medical technology manufacturers Exactech and RTI Surgical, renewable energy innovator Moltech Power Systems, and insurers Nationwide and Tower Hill all have a local presence. Avison Young reported a vacancy rate of 9% across the city’s office market in Q1 2022.
Florida’s largest city (954,000 residents) is a major military hub. Naval Air Station Jacksonville is the nation’s third largest naval installation. The defense industry in Duval County accounts for 97,000 jobs and generates $12 billion per year, good for 17% of the overall economy. The city’s 3.3% vacancy rate for industrial properties in Q1 2022 hovered near a record low, and four sales of industrial assets valued at $22 million or more closed during the first three months of this year, according to Colliers.
Sources: Avison Young, Brookings Institution, Colliers International, Cushman & Wakefield, Enterprise Florida, First Coast News, Florida Beef Council, Florida Department of Agriculture and Consumer Services, Florida Gulf Coast University, Florida Sports Foundation, Florida Turfgrass Association, Fortune, Guide to Greater Gainesville, National Hurricane Center,, The Pew Charitable Trusts, University of Florida, U.S. Department of Agriculture, Visit Florida, Yardi Matrix


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