The South Florida market experienced stellar economic growth in 2017 with unemployment in the Tri-County area falling to 4.1 percent at year end, down 70 basis points year-over-year.
Commercial real estate in the South Florida market felt the economy’s positive effects. The year was highlighted with new construction, tightening vacancies and rising rents across the board. Institutional investors and developers capitalized on the area as it continued to flourish and make a stronger foothold in the United States as a top-tier market.
As the market benefits from an improving economy, continued job creation and population increases will support further economic growth in 2018.
Now that 2018 is in full swing, we asked some of our top South Florida brokers what the strong performance in 2017 means for the year ahead.
1. “The South Florida market ended 2017 on a high note with strong economic indicators and sustained growth. In 2018, South Florida stands to benefit further from population and job growth as well as the positive effects of the new tax law. In fact, Florida as a whole is positioned to benefit from changes in the tax code more than other state, as the low tax burden should encourage more high-wealth individuals and companies to bring their business here.” –Larry Richey, Florida Market Leader
2. “A tight market in 2017 gave landlords confidence to raise rents substantially in existing properties. The strong fundamentals in the market are expected to continue creating a competitive landscape that will push rent growth further in 2018.” — Chris Metzger, Executive Director
3. “As the use eCommerce becomes commonplace in most American households, demand for warehouse/distribution space will continue to strengthen. There were 4.1 million square feet delivered to the industrial market in 2017, yet available space remained historically low. In 2018, we anticipate more developers will be motivated to build speculative construction in South Florida.” — Wayne Ramoski, Executive Director
4. “Positive momentum in South Florida’s office market drove strong leasing activity, increased rental rates and a greater push for new construction. Strong fundamentals, especially in Miami-Dade, fueled new projects and provided confidence to landlords to negotiate high rental rates across the region. We expect rental rates to continue increasing in 2018.” — Tony Jones, Executive Director
5. “Office space was limited in 2017 but new developments in both the CBD and suburban submarkets should alleviate the tight market and lack of space. Factors such as continued job growth as well as key improvements to our commuting system with the Bright Line Rail System will help to maintain momentum for office product as 2018 progresses.” — Brian Gale, Vice Chair
6. “2018 shall prove to be a transformative year in the retail landscape. From millenials to baby boomers, the trending desire is the same; experiential retail. Thus, the focus of new tenant mix will have a hefty inclusion of dining, entertainment, fitness and other service oriented businesses in which the overall experience can’t be replicated online.” — Dominic Delgado, Senior Director
7. “Notwithstanding all the headwinds and negative news about retail in 2017, it proved to be an excellent year for retail investment sales in the Southeast and we expect 2018 to be similar. The hottest sector in retail remains the neighborhood grocery anchored center and the most difficult is the B&C Mall sector.” — Mark Gilbert, Executive Managing Director
8. “With the exception of Hurricane Irma’s blow to the market in September, conditions in 2017 could be characterized as strong and steady. With an increasing population, economic and job growth, and higher single-family home pricing, the rental demand continues to outpace supply, despite a significant amount of new multifamily construction.
In 2018, watch for value add opportunities in areas lacking new construction, new properties being developed along the Brightline and new Tri-Rail stations, and senior communities fueled by the Silver Tsunami.” — Calum Weaver, Executive Managing Director