What 2024 Will Bring for Commercial Real Estate in Florida?

Since COVID hit the United States, demand for commercial real estate has gone down tremendously. One exception is Florida.

Florida has been a bright spot for the real estate market in general. The Sunshine State attracts many people due to its beautiful beaches and no income tax. Hundreds of thousands of people move there every year, plus many businesses are formed there.

Record numbers of people and businesses in the past few years have caused the commercial real estate market to grow tremendously. Office market dynamics from Miami to Tampa are outperforming national averages. Will Florida’s commercial real estate landscape remain resilient in 2024? Here’s a look at what to expect this year.

Lenders Will Be More Selective

Banks and other lenders have already become extremely picky about who they give their money to. With interest rates, insurance costs, and inflation all skyrocketing, capital for commercial real estate will be even harder to come by. Developers will be affected the most and will need to be strategic and proactive. The good news is that developers are still building in Florida and the demand remains strong from both domestic and international buyers.

Condo Redevelopment Deals Will Increase

More than 925,000 condo units in Florida are more than 30 years old. These aging condo buildings are prime targets for buyouts that lead to redevelopment. That’s because the condo associations for these properties are dealing with expensive repairs as well as the state’s insurance crisis. These factors are great news for developers seeking to breathe new life into aging condominiums. Condo redevelopments are a strategic move in response to higher maintenance costs and tightening regulations.

The Live Local Act Will Encourage Development

The Live Local Act is a statewide housing strategy with the goal of creating affordable housing opportunities. It allows more of Florida’s workforce to live in the communities where they work. The Live Local Act offers funding and tax credits. It is crucial for teachers, government employees, and others who have been priced out of the best employment centers and are forced to commute long distances. The act is great for developers, helping projects get done.

There Will Be Some Distress

2024 will not be all sunshine and rainbows. Many loans on commercial properties will mature later on this year and in 2025. Close to $1.5 trillion in commercial real estate debt will be due. Many buyers are enjoying low financing costs at the moment, but that will soon come to an end.

Learn More About Business Startups

Commercial real estate has really struggled since COVID and remote work took over in 2020, but Florida has still seen a lot of activity.

Considering buying commercial real estate? Orlando commercial real estate lawyer B.F. Godfrey from Godfrey Legal has worked both sides of the typical commercial transaction. We can help you avoid costly mistakes. Schedule a consultation today by calling (407) 890-0023 or filling out the online form.

Source:

commercialobserver.com/2023/12/4-trends-that-will-shape-florida-real-estate-in-2024/