There’s no shortage of conversation surrounding the commercial real estate industry, with employee demands, consumer spending, inflation, the current banking crisis, and a looming recession all top of mind. With the world wondering what’s next for both CRE and the economy at large, peers and clients alike have asked about my decision to launch Stream’s South Florida office.
Florida, in the midst of a population boom, is experiencing exponential growth, with residents and companies drawn by favorable tax laws and business-friendly policies.
Recognized by the U.S. Census Bureau for the fastest-growing population in the country, Florida holds the record as the third-largest state in the U.S. More than 400,000 new residents joined the sunshine state in 2022, bringing its population to 22,244,823 and its workforce to 9.6 million–surpassing New York’s for the first time in history.
The increase in population has created a seemingly insatiable demand for office and industrial space throughout Miami, Orlando, Tampa, Jacksonville, Fort Lauderdale, and Palm Beach. Since 2021, the industrial sector within these six cities saw 4,300 leases signed and a sales increase of 20% (accounting for approximately $12.5 billion).
Office vacancy rates fell as well, with 57 companies relocating or expanding within the Miami-Dade area alone.
It’s important to note that Issues impacting the nation’s CRE market have affected occupiers and investors in Florida as well.
Rising interest rates, two bank failures, and pending loan maturations (totaling $270 billion this year and $1.4 trillion over the next five) have done little to boost confidence within the CRE market as a whole. Demand for newer product has also created a shift, with Class B and older Class A assets experiencing increased vacancies and lower lease rates, some without access to the affordable capital needed to address them.
While these challenges are cause for concern, CRE has, in fact, experienced many of these challenges before. In 2004, a pricing bubble and shift in lending (leading into the global financial crisis) were most alarming, with occupiers and investors uncertain of their next steps. Most recently, the pandemic also created panic, with unprecedented shutdowns and a shift to remote work negatively impacting industries across the board.
The present difference, however, is that the market is currently experiencing each one of these challenges simultaneously (a lack of capital, remote work, and the potential of a recession), creating a layer of complexity to the CRE market that wasn’t necessarily there before.
Now more than ever, with numerous challenges afoot, occupiers and investors need elevated solutions to address concerns and achieve goals through a personal advisory approach blending data, expertise, and capital to identify and act swiftly upon trends to net results.
Hence the reason I chose to join Stream.
Why Stream. Why Now.
Historically, we have successfully navigated periods of uncertainty by digging deep into macroeconomic trends, landlord capital stacks, and shifts in investment strategies. We are relentless in identifying market dislocations arising during these times, providing opportunities for our clients to achieve significant bottom-line savings.
Stream’s research-led CRE platform is not only data-driven but expert-led and creativity-infused, with an agile, people-first approach to business consistent with the value we strive to provide our clients. Additionally, Stream’s ability to acquire and source development opportunities for the firm, and its clients, have made them an active investor and developer in markets across the U.S.
With Florida’s growth expected to continue, our team’s proven record of furnishing clients with comprehensive insights into the various components involved within the decision process, aligned with Stream’s distinct platform, are equipped to make waves, providing real-time solutions and opportunities for CRE investors and occupiers through research-led advisory, and discretionary capital—a competitive advantage in today’s evolving market.
Winston Churchill once said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” So, when people ask me, “Why Stream? Why now?” my answer is quite simple: the opportunities are endless.
Greg Katz is Executive Managing Director and Partner of Stream’s South Florida market. With more than 25 years of CRE experience, Greg specializes in complex lease restructures, lease monetization, and driving bottom-line value through efficiencies and cost reduction strategies. He was previously a Vice Chairman at Newmark and an Executive Vice President with Savills.
A Bisnow Event: Catching The Wave Of Corporate Migration
What do today’s workers in South Florida want in tomorrow’s office spaces? Greg will share his more than 20+ years of market experience at Bisnow’s upcoming Miami event on Thursday, April 27. Learn more about the event.