Retailers are flocking to Florida.
That’s evident as retail vacancies in West Palm Beach are virtually nonexistent this year, with occupancy rates approaching record highs, a trajectory nearly a decade in the making, according to Ken Himmel, the president of Related Ross.
Himmel attributed this demand to the “deliberate and sustained migration of high-net-worth individuals, financial executives, and tech leaders to South Florida” since the early days of the coronavirus pandemic in 2020.
“With nearly 90,000 new residents added to Palm Beach County in a few years, the city’s evolution from seasonal resort town to year-round city has been swift and strategic,” Himmel said.
The state’s dynamic economy, growing population and favorable tax environment make investing in commercial real estate in the Sunshine State highly profitable, according to commercial and industrial real estate brokerage Steinbauer Associates, Inc.
CityPlace, a neighborhood in West Palm Beach, is expanding by over 125,000 square feet with new retail brands such as Equinox, clothing brands such as Alo and Reformation, high-end makeup retailers like Bluemercury and home retail shops like Crate & Barrel.
“As top investment firms and institutions open offices nearby, they bring with them a highly educated and well-compensated population seeking elevated lifestyle experiences,” Himmel said. “That demand is being met by integrated, mixed-use developments like CityPlace, which combines office, residential, and commercial in a highly walkable district that has created built-in foot traffic and a steady flow of demand helping push vacancy rates below 3%, even as new square footage comes online.”
Himmel said developers are rapidly working to meet demand.
“As financial services and innovation hubs take root in the city, retail is rising in parallel and fueling a self-sustaining cycle of growth and demand that continues to accelerate,” he said.
Kelly Lyles of KL International Realty has also witnessed an uptick in retailers relocating to Florida.
“With companies like Foot Locker relocating from NYC to St. Petersburg, many retailers are looking to increase their footprint throughout the Sunshine State,” Lyles said, adding that some companies that already have a significant Florida presence in the state are also looking to expand. Publix, for instance, is planning to open 50,000 square-foot supermarket in Panama City Beach.
“Florida is a diverse state with a growing population and has always been a place where people looked to relocate. However, nowadays, low taxes and lower cost of living are driving both consumers and retailers here,” Lyles said.
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