Is This Reality a Growing Concern in Florida?

Transwestern is having one of its best years ever in the Southeast—and Bruce Ford, president of the firm’s Southeast division, has his finger on the region’s pulse.

MIAMI—Most of the construction we see in Florida is happening in the Southeast part of the Sunshine State—and most of that is in Greater Miami. Is this a concern? GlobeSt.com caught up with Bruce Ford , president of Transwestern ‘s Southeast division, to get his thoughts on construction activity and the condo cycle in part three of this exclusive interview. You can still read parts one and two: Bruce Ford: Bullish With A Little Caution Mixed In and Guarding Against Latin American Declines. GlobeSt.com: While construction activity has surged in the urban core as the region’s economy recovered, there hasn’t been as much physical product added to the market throughout the State of Florida. Is that a growing concern? Ford: Demand has certainly been running ahead of supply in Florida for some time, which leads to tightening markets and rising rental rates. This is due in part to the high cost of construction—labor and materials—as well as the fact that in South Florida residential development is competing for the best land sites, driving land costs skyward. There is certainly demand for new product, especially in the industrial sector where technology and height requirements make newer product far more valuable to businesses than even what was built in the 1990s. At some point in the near future, we’ll see more industrial and office development in response to the demand, particularly as rent growth helps to diminish the spread between existing product and what new product would need to lease for. GlobeSt.com: Florida has seen significant production in the condominium and multifamily markets, but the thought is industrial, office, and retail markets could use more space. Do you think this cycle will, and should, continue to deliver that product? Ford: Developers are cautious, and we don’t want to see a glut of new space, but businesses are searching for properties and spaces that are increasingly hard to find. We are seeing an increase in retail development in South Florida, particularly in mixed-use and experiential settings, but the office and industrial markets could easily absorb some quality new efficient product. As to multifamily or condominium development, I imagine that developers wouldn’t build if they didn’t have good reason to expect a return on their investment, but it’s not clear that the demand is there for this level of new construction all at one time. Having said that, South Florida will continue to attract renters and buyers, and high-rise developments in particular will always be an attractive option for those that want to live here.