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A Look at 2023 Commercial Real Estate Opportunities in Florida

Be on the lookout for high demand for medical office properties as well as education locations, including private schools, colleges and technical training facilities.

For commercial real estate professionals, Florida’s retail, office and industrial markets offer opportunities to serve owners, investors and developers. Fortunately, Hurricane Ian had relatively little impact on the state’s major metropolitan areas.

“We are seeing a wide range of post-pandemic opportunities for out-of-state companies coming here,” says Jennifer M. Forbes, broker with Commercial TeamMates in Coral Gables and 2023 commercial president, Miami Association of Realtors®.

Financial, technology and professional service companies are absorbing office space throughout the South Florida market. For example, the Business Development Board of Palm Beach County reported that 33 companies expanded or relocated there in the 12 months ending Sept. 30, 2022, absorbing 1.698 million square feet of office or industrial real estate.

Forbes noted that many new mixed-use developments appeal to tenants by incorporating live-work-play uses. However, older Class B and C office properties may struggle to compete with new buildings.

“The millennial workforce is looking for modern, open collaborative spaces,” Forbes says. “That can create redevelopment and repositioning opportunities for tired buildings, such as retrofitting the bathrooms, digitizing the directories and modernizing the common areas.”

Many retailers are reducing the square footage they need, since more customers are ordering online, says Cynthia C. Shelton, senior managing director of the Investments and Capital Markets division for LandQwest Commercial in Maitland.

The shift in demand can mean commercial brokers have an opportunity to look for creative repurposing or innovative uses of retail properties, she adds, citing a second-floor fast-food outlet that can drop orders to drive-through customers on the ground level.

Shelton expects medical office properties to be in high demand this year. “We have seen big-box retail buildings, strip malls and freestanding stores all being converted to medical uses,” she says. “As the state’s population ages, there will be growing demand for medical services, as well as senior housing with health-care components.”

Education is another growth sector in the state’s commercial market. That includes private schools, colleges and technical training institutions that can take advantage of empty spaces in malls and shopping centers, Shelton says.

Both Forbes and Shelton expect continued investment in the industrial sector as well. “Many transplants to Florida look for commercial opportunities,” Forbes says. “Warehouses and other distribution facilities are often high on their lists.”

In Southwest Florida and other parts of the state affected by Ian, commercial professionals can help owners and tenants navigate ongoing financial challenges, adds Shelton. “Small-business owners have been most affected by the storm,” she says. “They can use professional help when dealing with insurers and owners, such as revising a lease to reflect current conditions. Property managers can also demonstrate their lasting value to owners, tenants and users, as we are all part of the same community.”