Development Becoming an Increasingly Important Economic Driver for Florida

By Darcie Lunsford

Tourism, agriculture, international trade, aviation, aerospace, life sciences and the marine industries most often are the sectors that come to mind as being the main turbines that power Florida’s economy. But commercial real estate sector is nipping at their heels to get noticed.

Development of office, industrial, retail and entertainment properties in Florida emerged as the fifth largest in the nation, generating $11.8 billion in total economic output and employing 100,569 people, according to the 2016 Economic Impacts of Commercial Real Estate study, funded by the NAIOP Research Foundation. The 18,000-member NAIOP is the nation’s leading commercial real estate trade association.

Locally and nationally, the economic impact from the development and operation of office, industrial and retail properties exceeds skyscraper scale.

Wholly, commercial real estate development and the operation of existing properties contributed $834.4 billion to U.S. gross domestic product in 2015, the study shows. The sector fueled 6.1 million jobs and $255.8 billion in personal income.

Texas leads the nation for commercial real estate development impact with $55.4 billion in total economic output and nearly 400,000 jobs, followed by New York ($43.1 billion, 266,000 jobs), Louisiana ($32 billion, 237,000 jobs), and California ($22.2 billion, 152,000 jobs).

“I am not surprised that Florida ranks among the top five states. Louisiana is a bit of an anomaly, however, as it is driven by investments in refineries and energy infrastructure,” says Wells Fargo senior economist Mark Vitner. “Florida commercial real estate development is primarily being driven by the state’s rapid population growth and large tourist sector. Rapid population growth fuels demand for retail space, warehouses and apartments. Industrial development is also helping fuel office development, with gains coming from financial services, professional services, life sciences and R&D [research and development].”

The direct and indirect impact of developing the nation’s 429.3 million square feet of new office, retail and industrial projects from design to tenant improvements rang up $450 billion for the U.S. economy in 2015. That was noticeably less than $528 billion generated in 2014, but still more than in the previous three years, the study shows. Development supported 3.2 million jobs.

But think of commercial real estate as the economic gift that keeps on giving.  Once a building is up, it still must be maintained—in good times or bad.

The nation’s commercial real estate owners directly spent $145.6 billion in 2015 to operate the nation’s 45.1 billion square feet of existing commercial properties. Operating commercial real estate supports nearly 2.9 million jobs, with $110.1 billion in wages. In total output, running existing commercial properties contributes $384.1 billion to the U.S. economy, according to the study.

“Real estate, and development in general, has always been one of Florida’s legacy economic foundations along with tourism and agriculture,” says Bob Swindell, president of the Greater Fort Lauderdale Alliance. “Commercial real estate inventory provides economic capacity and is the vital infrastructure component to support the growth of our targeted industries.”

By product type, you don’t have to look further than the millions of square feet of new big-box warehouses across South Florida, to understand that industrial development is king in Florida—and the data shows this.

The state ranks third in the nation for warehouse development with $2.9 billion in total economic impact. Texas was first with $6.6 billion, followed by California with $5.5 billion, the study shows.

Florida ranks ninth for retail development with $2.1 billion in total economic output and 30th for office development, reflecting the dearth of new office projects post-recession.

“Florida is a great place to live. The population continues to grow, fueling demand for both housing and for business to service the expanding population,” says Brian Latta, vice president of development for Chicago-based Bridge Development Partners, which has an office in Miami. “Rising interest rates may dampen growth in the short run, but Florida being an attractive place to invest, the markets will ultimately correct themselves.”

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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.