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Florida’s Rapid Growth – People and Businesses Are Migrating to the Sunshine State in Droves

Date:
March 30, 2023
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Greybrook has been investing in real estate developments in Florida since 2015, with our first investment in the development of our 100-storey Waldorf Astoria Hotel and Residence in Miami, followed by investments in multifamily and high-rise developments in Fort Lauderdale and Miami’s Downtown and Wynwood neighbourhoods.

Since we began investing in Florida, we have watched the Sunshine State grow significantly, benefiting from consistent migration to the state and a transformation of cities and key markets along the east coast.

With a population of over 22.2 million people, Florida is the third most populous state in the U.S., and last year, it took the top spot as the fastest-growing state in the U.S for the first time since 1957.(1) The state has experienced steady growth, growing by ~15% over the past 10 years, and it is projected to grow by another 17% to ~26 million people by 2030.(2) As Florida continues to grow, we are keenly focused on expanding our investments in the state both in high-rise and low-rise residential developments.

What is driving migration to the state?

Florida has historically been an attractive state, consistently drawing in millions of people due to its warm temperatures, favourable tax structure, relative cost of living, and quality of life. Increasingly, with the recent surge in corporate relocations to Florida and new businesses setting up shop in the business-friendly state, an influx of working professionals have flocked to the state, attracted to job opportunities in growing and emerging industries.

Corporate Relations, New Business Growth and Job Opportunities

Florida’s business-friendly environment and the government’s efforts to draw in businesses in key industries from other states across the country, particularly those with higher corporate tax rates, stricter regulations, and a higher cost of living, such as California and New York, have paid off. Over the past few years, many businesses have relocated their head offices or expanded into Florida. According to the Miami-Dade Beacon Council, a record-breaking 57 companies bringing ~8,000 new jobs made commitments to relocate or expand into Miami-Dade in 2022, with another 150 companies in the pipeline.(3) In 2021, Financial powerhouse Citadel and its billionaire CEO, Ken Griffin, relocated to the Magic City from Chicago, and Blackstone announced their plans to open an office in Downtown Miami for their new technology unit. Legendary New York billionaire investor Carl Icahn was among the early New Yorkers to migrate to Florida in 2019, relocating his company headquarters from Manhattan to Sunny Isles. And, since the onset of the pandemic, Miami’s Mayor, Francis Suarez, has been actively wooing tech companies, entrepreneurs, and venture capital firms in an effort to make Miami the next Silicon Valley. Suarez has invited hundreds of firms to move to Miami, including his appeal to Elon Musk to relocate Twitter’s offices to Miami. The emergence of the tech industry has transformed Miami into the number one city in the country for tech job growth and migration.(4)

In Palm Beach County, over 140 companies relocated or expanded to the county over the past five years, bringing over $1.1 billion in capital investment and creating or retaining over 13,000 jobs.(5) Palm Beach has grown as a hub for financial firms, with a slew of heavyweight finance companies opening offices in West Palm Beach, including Goldman Sachs, Point72 Asset Management, and BlackRock. With so many financial services firms establishing a presence in West Palm Beach, it has been dubbed “Wall Street of the South”. Along with the companies has come a supercharged migration of Manhattan’s elite to West Palm Beach, fueling a surge in the region’s luxury real estate, golf club memberships, and private-school enrollments. An entirely new neighbourhood is being built including new restaurants, after-work bars, and gleaming towers, all in an effort to transform the city into a thriving finance center.

Orlando has also experienced a significant boom in growth and migration. Its central Florida location provides easy access to major ports, airports, and highways making it an ideal place for businesses looking to establish a presence in the Sunshine state. It is fast emerging as a hub for innovation, technology, defense, and finance, offering ample opportunities for entrepreneurs, investors, and job seekers. With major corporations like Electronic Arts, Siemens, AAA, and Tupperware Brands based in Orlando, the city has become a magnet for innovation, business growth, and job opportunities. Orlando’s large talent pool has attracted many companies, including Lockheed Martin, Oracle, Verizon, and Deloitte.(6)

Beyond corporate relocations, Florida is one of the top states for new business growth. In 2023, Wallethub.com ranked Florida the 2nd best state to start a new business in the U.S.(7) This ranking is based on 27 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise and three key dimensions which include business environment, access to resources, and business costs. Florida is also a top destination for small businesses and ranked first for the rate of new businesses by state, experiencing a net increase of 29,995 small businesses since 2020. Florida was the top location for newly formed business entities from Jan 2021 to Jan 2022 according to the U.S. Census Bureau. Of the 5.8 million new business applications filed nationally, 12% were filed for new business entities in Florida.

As companies continue to relocate and open-up shop in Florida, they are bringing an influx of young professionals with them, changing the perception of the Sunshine State from a locale primarily for retirees to an in-demand hub for tech, finance, and innovation.

Warm Climate, Lifestyle, and Relative Cost of Living

Florida’s warm and sunny climate, the abundance of beaches, parks, and recreational and outdoor lifestyle have always been a draw. During the pandemic, these features became ever more appealing, particularly for residents in colder, more expensive covid-restricted cities in northeastern states that flocked to Florida. Last year alone, more than 64,500 former residents of New York State moved to Florida, and more than 506,000 out-of-state driver’s licenses were exchanged for Florida drivers’ licenses. The exchange revealed that most migrants came from New York, California, New England, and the Midwest.(8)

Florida’s favourable tax structure and cost of living are also major factors in one’s decision to move to the state. According to the Tax Institute, Florida ranks No. 4 in individual income tax, with zero state income tax, in addition to a low average sales tax of just 6%. When considering the relative cost of living, Florida ranked in the middle of the 50 states in the World Population’s 2023 Cost of Living Index, well below New York, California, Massachusetts, and Connecticut.

The state’s advantageous tax structures, sunny climate, and lifestyle also appeal to the wealthiest. Florida is the number one state for high-net-worth migration, with wealthy high-net-worth individuals flocking to Florida at four times the rate of any other state, with the majority migrating to South Florida.(9) Two Cities in Florida, Miami and West Palm Beach, are among the top 5 cities in the U.S. experiencing millionaire growth according to investment migration firm Henley & Partners and New World Wealth. Miami is home to the most billionaires in America, the most millionaires and centi-millionaires (those with a net worth of over $100 million). In Palm Beach, approximately 70,000 high-net-worth individuals migrated to the area from New York City, taking an estimated $34 billion in income with them.(10)

Florida’s Economy & Diversified Industries

Florida’s economy ranks among the largest in the world. If it were a sovereign nation in 2022, it would rank as the world’s 16th-largest economy, according to the International Monetary Fund. Domestically it is the fourth-largest economy in the United States, with a $1.4 trillion gross state product (GSP) as of 2022.(11)

From an employment standpoint, Florida’s unemployment rate hit a historic low in December 2022 at 2.6%, the lowest among the nation’s top ten largest states and 1.1% lower than the national average of 3.7%, with job growth exceeding the nation’s for the twentieth consecutive month. Florida’s total private sector employment increased by 5.2% (+420,700 jobs) over the year to November 2022, growing faster than the national private sector job growth rate of 3.6% over the same time period.(12) Since 2018, Florida has added 731,200 jobs, an increase of 8.3%.(13)

The state’s primary industries, agriculture, tourism, international banking, and healthcare research, help diversify the state’s economy as it continues to strengthen its foothold in sectors such as aerospace and aviation, life sciences, manufacturing, cybersecurity, and information technology.

Life sciences: Florida has a growing life sciences sector, with a concentration of companies and research institutions focused on biotechnology, pharmaceuticals, and medical devices. The state is home to several major research institutions, including the University of Miami, the University of Florida, and the Moffitt Cancer Center, which provide a pipeline of talent and innovation for the life sciences industry. Florida ranks second in the country for pharmaceutical and medical manufacturing, with over 46,000 healthcare establishments.(14)

Cybersecurity and IT: Florida is emerging as a hub for cybersecurity companies and research institutions, with a concentration of companies and organizations focused on developing cybersecurity technologies and solutions. In 2021 Florida solidified its standing as a national tech hub adding more new companies in the sector than any other state. According to a report from the trade group CompTIA, Florida added 2,715 tech businesses in 2021 and added the second-highest number of tech jobs at 10,522. The state is also home to a growing clean technology industry with over 11,750 cleantech companies registered in the state.(15)

Aerospace and aviation: Florida has a long history in the aerospace industry and is home to NASA’s Kennedy Space Center and several major aerospace companies. The state is also home to several commercial airports and has invested in infrastructure to support the growth of the aviation industry.

Florida has also heavily invested in its infrastructure, including its transportation systems, ports, airports, and broadband infrastructure. The state has invested in several major transportation projects, including the expansion of Interstate 4 in the Orlando area, the Wekiva Parkway construction, and the Miami International Airport and the Orlando International Airport. The Port of Miami has undergone a major expansion to accommodate large cargo ships to support international trade and tourism, and public transit infrastructure has also improved and expanded including the SunRail commuter rail system in the Orlando area and the Brightline high-speed rail system connecting Fort Lauderdale, Miami, West Palm Beach and Orlando expected to begin operations in 2023. In 2020, the state established the Florida Office of Broadband to increase internet access in rural areas to improve connectivity across the state, and over the past few years various g business incubators and accelerators have been created to support innovation and emerging industries. Some examples include the Tech Runway in Boca Raton, the Goldstein Business Accelerator in Orlando, and The Launch Pad in Miami.

These investments and many more in infrastructure and innovation are helping to drive economic growth, create opportunities for innovation and make it more efficient for businesses to operate with the state, across the country and globally.

Greybrook Investment Focus in Florida

As more businesses open and relocate to the state and governments work hard to attract both businesses and people, Florida will continue to thrive and grow, driving steady demand for new housing of all types to accommodate the needs of a varied demographic (i.e., families, young professionals, students, retirees). Florida, in particular South Florida, will continue to be an area of investment focus for Greybrook as we look to expand into additional residential asset classes including ground-related Greybrook will be partnering with GT USA on future low-rise housing communities in South Florida. GT USA is  a Fort Lauderdale-based developer backed by two long-term Canadian real estate developers with extensive experience in low-rise housing development, Greenpark Homes and Treasure Hill Homes, and an operation team that has deep on the ground experience and expertise in the Florida market. Treasure Hill is a long-standing trusted Greybrook partner on several low-rise housing communities and we look forward to expanding our presence together in Florida. To learn more about upcoming investment opportunities in the South Florida market, contact us at info@greybrook.com.

 

1 – United States Census Bureau
2 – Florida Chamber of Commerce
3 – Miami-Dade Beacon Council
4 – Wall Street Journal
5 – Business Development Board of Palm Beach County
6 – Business Insider
7 – WalletHub
8 – WJHG
9 – Smart Asset
10 – Business Development Board of Palm Beach County
11 – GDP by State
12 – Flogov.com
13 – US Bureau of Labor Statistics
14 – World Atlas
15 – Tampa Bay Times

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