The Southeast Florida net lease market is one of the most prosperous in the U.S. Its compact demographics, environmental allure, and international interest have positioned it for a future of economic growth. Net lease investors have been consistently active and recently cap rates for this area have witnessed compression. Going forward, it’s easy to see why Southeast Florida can be ranked among other top tier markets such as Washington DC, New York and Chicago.
For starters, the geographic characteristics of Southeast Florida are proportioned for success. Natural borders such as the ocean and everglades prevent sprawl – making density a natural byproduct. This is a key advantage in today’s market where dense and urban locations are succeeding while those marked by sprawl continue to be recessed. Though Florida itself has many instances of urban sprawl, Southeast Florida is naturally protected.
These natural characteristics give Southeast Florida a very strong demographic profile. A population of 5m+ is located in an area that is 120 miles long and only 20 miles wide. Furthermore, the area’s natural beauty attracts many wealthy vacationers and Florida’s status as an income tax free allows investors to write off their visits to their properties. As a result of these strong demographics, many premiere net lease retailers have a presence in Southeast Florida, creating an attractive pool of net lease assets.
Foreign investment is also key to Southeast Florida’s success. For many international investors, especially South Americans, Miami is the first city they think of when they think of the U.S. Naturally, investors prefer real estate in their backyard and for the growing economic power of South America; Miami is a natural investment hub. Spain is another country with a large presence - about 60% of the 300 Spanish companies located in Florida are established in the Miami-Dade area. As the importance of international investment grows, Southeast Florida is poised to reap the benefits.
For the net lease investor Southeast Florida represents an extremely attractive market. Its strong demographics and foreign investment are on par with other top tier markets such as Washington DC and New York. Add to that Florida’s income tax free status and many investors may find the ideal environment in Southeast Florida.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
