Is Florida Recession-Proof? Pandemic Migration And A Pro-Business Climate May Have Made The State Immune
A battle is waging in the Florida House of Representatives where leadership wants to stop state funding for the Visit Florida marketing campaign.
The goal is to get Florida’s 62 counties to ante up. The legislative battle is ironic, considering Florida recently completed its most successful marketing campaign in its history, and it didn’t cost a cent. The campaign was called the global pandemic.
Even though the state spent upward of $50 million in advertising and marketing during COVID, it became clear that the unusual freedom offered to visitors, compared to other locked-down states, built a funnel for new residents. According to the National Association of Realtors, last year saw nearly 320,000 people move to Florida, and they’re not leaving. Businesses and commercial real estate (CRE) investors are also flocking to Florida because some think the state might be recession-proof.
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“There’s no doubt that we’re headed for a weird economic year nationally. No one knows what’s going to happen from a commercial development standpoint. But I don’t think the Florida economy will have a recession. We’re in a little bubble here,” Diego Bonet, managing partner at Miami-based real estate development and investment company LD&D, told Benzinga. “We have $5 million luxury condos here selling with strong demand. People coming here have enrolled their kids in our schools and moved their companies here. It’s a long-term trend.”
The Florida migration and pro-business attitude have also helped investors because, according to Bonet, you can still get financing here — just not at the levels seen last year.
“If you’re trying to get something capitalized now, there’s a better chance in Florida than anywhere else, but it’s still challenging,” he said. “We’re in a tough microeconomic market, but our saving grace is we’re in Florida, and it just doesn’t seem like a recession here with projects still getting off the ground.”
Unlike most of the country, Florida is also bucking the negative trends of office space vacancy. A recent report from Islander News heralded the influx of companies moving to South Florida, including Miami’s Brickell Financial District. Office tenants such as Citadel, Microsoft Corp., WeWork Inc. and Blackstone have moved corporate employees to the financial district in the past year. At the area’s new 1 million-square-foot 830 Brickell office building, space has rented for up to $130 per square foot.
Bonet says it’s more than the weather that’s drawing people to sunny Florida.
“I think of it more like a migration to a place that offers a better quality of life. People from the Northeast came here and found this was one of the best places to be during the pandemic. And they stayed,” he said.
“We also have a very friendly business climate, and we’re excited about new CRE projects. Look at the people cooped up in 600-square-foot studios in New York. I used to live there and see my friends more often in Miami than in New York.”
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