In 2022, Florida is leading the recovery with a red-hot industrial market including office demand that is leading the nation and a strong interest from investors despite rising interest rates.
NAIOP South Florida, the Commercial Real Estate Development Association, kicked off 2022 with its annual economic outlook, an in-depth discussion about the economic trends for the coming year in commercial real estate.
The discussion was led by two of the nation’s top economists, Mark Vitner, senior economist from Wells Fargo, and Rebecca Rockey, global head of economic analysis and forecasting for Cushman & Wakefield. Darcie Lunsford, executive vice president of Butters Realty & Management, was the moderator.
“Florida is leading the recovery, which is becoming our next expansion,” said Rockey. “Multifamily demand is coming in at 10 times its normal pace, office absorption is expected to be positive in 2022 and 2023 and industrial vacancy is expected to stay below 2.5% with rents surging another 6 to 10% in 2022-23. Investors are taking a hawk-like focus on the Sunbelt, and this will continue in 2022, with all asset types drawing interest from investors, including retail and hotels.”
Lunsford questioned the U.S. debt outpacing GDP and asked, “Is our day of reckoning coming?”
Vitner weighed on the overall economic outlook for the U.S. “In 2022 and beyond, inflation is going to be problematic with 3-5% as the new normal. Supply chain issues will also persist because they are byproduct of inflation and the expansive monetary policy that has been in place since the pandemic began.”
With migration at the highest level in 15 years, Florida is the biggest recipient of new residents. “States that locked down the hardest, lost jobs,” added Vitner. “Florida has created 50,000 new jobs each month with even stronger job growth expected in 2022, especially in the professional services, financial and technology sectors.”
Panelists also gave their opinion on topics ranging from the housing market and mortgage interest rates to the retail sector, which held up surprisingly well despite the pandemic and the intensive attention it received at the height of the pandemic.
To listen to the presentation, visit www.naiopsfl.org/01-20-22-naiop-s-2022-economic-outlook-virtual-program. For upcoming NAIOP South Florida events, visit www.naiopsfl.org.