Miami's Commercial real estate market: outperforming & thriving
Miami's real estate market has been experiencing a significant boom, unlike other cities in the nation. And the commercial real estate sector is no exception. This upward trend in the market has caught the attention of industry experts and professionals. Avison Young's Chairman of U.S. Capital Markets Executive Committee, Principal and Managing Director-Miami, Michael Fay, and Principal John Crotty recently shared their views on the thriving Miami commercial real estate market during a conversation with Commercial Observer Executive Director Robyn Reiss.
Miami's Market Growth: A Flourishing Environment
Fay and Crotty expressed optimism about the continued growth of the Miami commercial real estate market. They believe the market's strength stems from various factors, including the influx of people and companies moving to the area, and the flow of new and renewed capital from around the globe.
The thriving market is not limited to just one asset class; South Florida's current strength is apparent across various real estate sectors. In particular, office spaces in Miami and South Florida have experienced minimal vacancies and continued rent growth, proving the area's robustness.
The lobby of The Fifth Miami Beach (Tecma/Courtesy Sumaida + Khurana and Bizzi & Partners)
The Role of New Office Buildings
From headline-grabbing office towers like the fully-leased Class A trophy 830 Brickell office tower to the future, largest office tower of One Brickell City Centre rising 1,040 SF and The Fifth Miami Beach, the first of its kind in Miami Beach with a wellness component, Miami office buildings are changing the skyline in Miami. The Fifth Miami Beach will add Class A office buildings to complement its high end luxury real estate market.
New office buildings are being constructed in Miami, which further highlights the strength of the market. The city's ability to attract new developments and maintain a strong demand for office spaces illustrates the bright future of Miami's commercial real estate market and the Miami real estate market in general.
Crotty believes that opportunities for growth will be found in the development sector. With a lack of supply in multifamily and industrial properties, demand in the market remains strong. This creates a favorable environment for developers looking to invest in the Miami real estate market.
The Influence of Global Developers
The Miami real estate market has attracted developers from around the world, bringing fresh perspectives and ideas for thoughtful development. Fay explained that these developers have a different view than those already established in the region, contributing to the diverse and innovative growth of the market.
Factors Contributing to Miami's Prosperity
Both Fay and Crotty identified several factors that give the city a competitive edge, including tax benefits and a pro-business environment.
“The thing that really resonates with me, and what I’m seeing from folks coming in, is the tax benefits,” said Crotty. “Florida having no state income tax is an incredible incentive. Then there’s the pro-business environment we have here, from both a local and also a statewide perspective. We’re seeing groups from Chicago, New York, even the West Coast and California relocating here, and when they see the quality of life, the sunshine 12 months a year, in addition to the benefits I just mentioned, it sells itself.”
Florida's lack of state income tax has been a major draw for businesses and individuals relocating to the area. This tax advantage makes Miami an attractive destination for those seeking financial incentives.
Miami's pro-business environment, from both a local and statewide perspective, has contributed to the city's appeal. Companies from various regions, such as Chicago, New York, and even the West Coast, have been relocating to Miami, drawn by the favorable business conditions and excellent quality of life.
The Impact of Miami's Mayor
Fay commended Miami Mayor Francis Suarez for his efforts in promoting the region's success. Mayor Suarez's progressive initiatives have undoubtedly contributed to the thriving Miami real estate market.
The Convergence of Progressive Companies in South Florida
The booming Miami real estate market has attracted a diverse range of companies, including private equity firms and financially-related organizations. This convergence in South Florida has fueled the market's growth and transformed the region into a hub for various industries.
The Appeal of Miami's Location
Miami's strategic location offers numerous advantages, including its proximity to 30 different countries within a three-hour flight. This accessibility has undoubtedly contributed to the city's appeal as a destination for businesses and investors.
The Importance of Time Zones
Fay highlighted the significance of Miami's position within the financial time zone, which many businesses adhere to. This factor further enhances the city's attractiveness as a business hub.
The Role of Sports Teams in Miami's Growth
The success of Miami's sports teams, such as the Panthers and the Heat, has also played a part in the city's overall growth. These teams have contributed to Miami's vibrant and dynamic atmosphere, making it an even more appealing destination.
In Conclusion: Miami's Real Estate Market Continues to Thrive
The Miami real estate market's growth can be attributed to a variety of factors, including its favorable tax environment, pro-business atmosphere, strategic location, and the convergence of progressive companies in the region. Industry experts, such as Avison Young's Michael Fay and John Crotty, remain optimistic about the market's future and anticipate continued growth in the coming years. With such a promising outlook, it's no wonder that Miami's real estate market continues to capture the attention and investment of businesses and individuals from around the world.