OPINION: Florida's Growth Continues

Florida is not only home to millions of consumers, it is also the future home of millions more. Residential growth here is predicted to skyrocket, and is already climbing fast, with more than 1,000 people on average moving to the state every day. While there has been a slow down in residential sales, we believe in the long run that Florida will continue to grow, based on its population growth. According to the US Census Bureau, Florida's population was nearly 17.4 million in 2004, with a projected surge to 24.4 million by 2020 and 30.1 million by 2030. Many experts believe Florida's retail development is significantly behind that of the residential; this, combined with a new population hungry for new places to live, shop and eat shows a bright future for retail investments in Florida.

The state's growth and sunny retail outlook are fueled by multiple factors, from the meteorological to the socioeconomic. Importantly, this growth is directed and controlled geographically by the state's natural boundaries. Florida has both the room to grow and an inherent capacity to limit urban sprawl, making retail development more predictable and stable in the long term, especially in South Florida with the ocean to the east and the Everglades to the west and south. While some US cities creep evermore outward from their centers, Florida's metropolitan areas--including Tampa, Miami and Orlando--are relatively contained, which makes planning for retail development easier, because people stay close to home when seeking goods and services.

In addition to the state's smart growth, Florida also benefits from a relatively wealthy population. In fact, according to the US Census Bureau, Florida's residents are in the top 10 per capita when it comes to spending on retail goods. This statistic does not account for Florida's tourists, who are also known to spend significantly on retail goods.

Investing in Florida land is not a new trend. In fact, for many years the potential of Florida real estate has been validated by increased acquisitions of land throughout the state. These days, growth is occurring so quickly, and the predictions are so strong that developers and investors who want to lock in areas for commercial retail development are taking more risks, and purchasing land that is years away from actual development, also known as "banking land."

Historically, retail developers have demanded long investigatory periods before they place significant dollars on the line. The developers use this time to get governmental approvals and sign leases with retailers, thus significantly curtailing their risk. This often creates an impasse with the land owner who often is not a real estate professional, rather an investor looking to cash out in relatively short order. By banking the land a developer is buying the site at a significantly earlier point in the process; therefore taking more risk, but ideally achieving a better price from the seller.

The retail market continues to grow vigorously, as the population does. Lower vacancy rates and higher asking rents are predicted in the state's major markets in every sector. Florida's positive fundamentals make retail a sound investment whether you are banking land or buying income producing property.

Mathew L. Adler is an executive vice president of Adler Group. He is the founder and manager of the company's Florida Retail Land Bank.