Berger Singerman Survey Shows Real Estate Optimism Remains High Despite Concerns about Government Policies and Land Availability
MIAMI, FL. July 8, 2015 - Buoyed by increased access to credit and overall confidence in the strength of the market, decision-makers in South Florida's real estate industry are optimistic for the second half of 2015 according to a survey released today from Berger Singerman, Florida's business law firm.
Real estate professionals that participated in the survey were cautiously bullish, with 43 percent expecting the economic outlook for the remainder of 2015 to be more positive than the first six months of 2015. Marc Stephen Shuster, partner and co-manager of Berger Singerman's Business, Finance and Tax Team, noted the overall optimism within the industry remains tempered, especially due to concern that interest rates are expected to rise.
In what has become an industry standard in Miami-Dade County, 36 percent anticipate foreign investment will show a slight increase for the same time period.
“Not surprisingly, foreign investment continues to be a major driver within the South Florida real estate market, but this trend is not limited to Miami-Dade County. We are seeing investment move north, with Broward County emerging as another hotspot for activity, especially as investors continue to flock to the U.S. seeking a safe place to bank their money,” said Jeffrey R. Margolis, partner and co-manager of the Business, Finance and Tax Team at Berger Singerman.
Two sectors will deliver the highest returns within South Florida's commercial real estate market, according to the results. Multifamily development will continue to be a main driver, according to 41 percent of respondents, while hospitality and hotel development came in second, receiving 24 percent of responses.
“As we heard from the speakers at the recent NYU International Hospitality Industry Investment Conference, Miami is a shining beach of success in this sector, exceeding standards for every major financial marker for the hospitality industry,” noted Shuster. “We anticipate this sector will continue to strengthen, buoyed by the current economic climate, demand outpacing supply and interest from investors both local and foreign in getting a piece of the pie.”
While overall results reinforce confidence in the market, the respondents were not without cause for concern. Political issues continue to impact the real estate sector, with 21 percent attributing their lack of confidence to the current administration and government policies. Another 41 percent cited global economic conditions and uncertainty as the number one deterrent of their confidence.
Other key findings include:
· 38 percent cited their optimism in the market is due to the improvement of the U.S. economy, followed by 29 percent noting the availability of debt/equity capital investments
· In addition to the above noted factors, respondents expressed that other issues impacting their confidence in the market include land scarcity, transportation and lack of workforce housing
· Overall, respondents foresee no changes in cap rate performance across five major market segments: multifamily, retail, office, industrial and hospitality development
The survey from Berger Singerman polled South Florida's real estate community, including developers, brokers, and executives from financial institutions and investment groups.
With experience spanning residential, multi-family, retail, office, industrial and hotel transactions, Berger Singerman's real estate attorneys offer clients strategic advice and representation, in-depth industry knowledge and an unparalleled commitment to providing the highest level of service. The team has worked with real estate developers, investors and lenders on projects throughout Florida, in neighboring states and in other jurisdictions.
Berger Singerman LLP, Florida's business law firm, has more than 80 attorneys working out of offices in Boca Raton, Fort Lauderdale, Miami and Tallahassee. Members of the firm have expertise in all areas of commercial law, including banking, business reorganization, corporate securities and M&A, dispute resolution, employment law, white collar crime, real estate, environmental and land use, insurance, tax, estate planning, and probate. For more information, please visit www.bergersingerman.com or its Doing Business in Florida resource www.flabusinesslaw.com
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