Earlier this month, Bilzin Sumberg’s South Florida Redevelopment Conference engaged hundreds of real estate developers, government staff and officials, architects, engineers, and construction professionals from 12 different states and three different countries in thoughtful discussions about the current real estate market and the future of land development in South Florida. This year’s innovative virtual platform allowed a broader audience to participate in an exploration of market trends, obstacles, and unique opportunities for real estate development and public-private partnerships in the region.
During a session focused on the changing landscape for commercial and residential development, panelists discussed pre-COVID-19 trends and how the realities of a global pandemic subsequently shifted market focus. Prior to the nationwide shutdowns in March of 2020, both office and industrial real estate were in high demand in South Florida. While activity in the industrial sector has remained relatively stable, the demand for office space in the region has grown exponentially over the past year. The shift to remote work for a large portion of the workforce and the luxury of year-round outdoor weather have driven many office employees down south.
As panelist Rajen Shastri, Founder and CEO of Akara Partners and new South Florida resident, observed, “One of the key changes engendered by COVID is optionality when it comes to office tenancy. Companies will become increasingly flexible in accommodating requests for remote work or changing office locations for employees even after COVID has gone, and this will be a boon for South Florida’s real estate market.”
The migration of white-collar professionals to the Miami area is not limited to individual employees. C-suite executives and entire corporations have announced plans to relocate to the sunny shores of Miami Beach or the bourgeoning downtown Miami area, Starwood and Blackstone being only two examples. Local governments are welcoming this new energy and focus on the development of Class-A office space, as it brings more diversity to the local economy and their respective tax bases. Municipalities are faced with sweeping revenue losses as a result of COVID-19, especially those that rely heavily on the hospitality industry such as Miami Beach. Greater diversity in the local real estate markets will help create more resilient economies in the face of future challenges.
More entrepreneurial and skilled workers making South Florida their permanent home also means more companies will be born and bred in the region, breathing new life into the Miami area’s corporate culture. As my colleague, Carter McDowell, observed, “It’s a big deal for Miami to get pieces of companies moving here, even if it’s not the whole company, because for the first time in a long time Miami will have a true corporate culture. It’s a real sea change when it comes to the local business culture.”