Seven Real Estate Highlights from the CBRE Conference in Florida
CBRE brought some of the top real estate experts to Miami’s Brickell Avenue to gaze into the future and identify the best money-making opportunities.
Here are some of the most insightful observations from CBRE’s 2015 Florida Market Forecast event.
Florida is poised for many years of economic growth
CBRE Global Chief Economist Richard Barkham said to ignore the media naysayers and focus on the economic fundamentals, which all points to robust growth in Florida’s economy. The London native expects at least four, maybe five, years of growth in the state’s commercial real estate market, with lower occupancy rates and rising rents.
The key drivers are the surging population and increased tourism, Barkham said. That will drive retail spending, demand for warehouses and distribution centers, multi-family, and eventually office space, he said. He expects Florida’s retail market in particular to outperform the rest of the nation. That should drive demand for new shopping centers for both residents and visitors.
However, he cautions that projecting five straight years of rent growth might be too optimistic.
“To be very safe, wrap up all these development projects in three year’s time,” Barkham said.
Properties near rail will be premium
Florida East Coast Industries President and CEO Vincent Signorello laid out the numbers the company found in determining whether its All Aboard Florida passenger train from Miami to Orlando was viable and made a compelling case for why its stations could become development hubs. After a three-year study asking people who commuted between the cities whether they would use passenger rail at All Aboard Florida’s price points, FECI determined that about 110,000 people a year were likely riders.
“Our development team saw that and decided to go built until we had no land left,” Signorello said. “If the ports are successful in moving product to South Florida, we ought to be rooting for all the new building coming up here.”
Multi-family is in huge demand
Joel Altman, president and CEO of Boca Raton-based the Altman Cos., said two of its Broward County apartment projects are on pace to have stable occupancy just 30 to 60 days from completion. The company generally expects to pre-lease 20 to 25 units per month, but its five South Florida apartment projects are each signing up 30 to 45 tenants per month.
A host of factors are driving demand for apartments, he said. About 830 families a day are moving to Florida. Ownership of single-family homes has declined from 69 percent before the recession to the low 60s, and some of that it by choice. Altman said people are getting married later in life, so they’re renting longer. Plus, there was almost no apartment construction during the recession so there’s pent up demand, he said.
Since there’s a limited supply of land in South Florida for garden-style apartments, that will drive rents higher, Altman said.
“South Florida is one of the best places in the country for investing,” Altman said.
Health care moving out of the hospital
Patients are increasingly seeking treatment in out-patient and office settings, so health systems are shifting their real estate needs off hospital campuses, said Ana Lopez-Blazquez, chief strategy officer of Miami-based Baptist Health South Florida. Her non-profit is opening facilities in the community, including urgent care and physician offices.
Since many small physician practices are forming large groups, Baptist Health is configuring its medical office buildings to accommodate these big practices, she added.