Commercial real estate experts forecasting slow growth in the year ahead, but not nearly as pessimistic as some predict
Dan Cioci of Risk Strategies; John Allen of Chronos Underwriters; Rob Nesselt of Risk Strategies; Chad Clark of Risk Strategies; Marc Kleiner of Kleiner Law Group
NAIOP South Florida, the Commercial Real Estate Development Association, recently hosted its annual economic outlook panel, where commercial real estate industry professionals gathered to discuss the economic forecast for 2023.
Hosted by Marcus & Millichap and Risk Strategies, the panel offered insightful commentary from Marcus & Millichap Senior Vice President and National Director John Chang, Chronos Underwriters Chief Executive Officer and President John Allen, Property Tax FirstPointe Advisors Managing Partner Brian DePotter and Itasca Construction Associates Vice President Sandra Pabon. Marcus & Millichap Senior Vice President and past NAIOP President Ryan Nee served as moderator.
Ryan Goggins of Sunbeam Properties & Development and Reba Larney of First American Exchange Company
“There are many benefits of being a member of NAIOP South Florida, from continued education to networking to career advancement,” said NAIOP South Florida Executive Director Jules R. Morgan. “This annual panel discussion is always an important one because it sets the tone for the entire year ahead and brings together some of the brightest and most well-informed minds in the industry to share their views with our members of how economic conditions will impact their business.”
Panelists shared their perspectives on the hotly debated question of whether the United States will tip into recession in 2023, and the consensus was considerably more favorable than what is being predicted by many for the year ahead. Speakers also emphasized the “Florida factor,” a term used to describe the continued influx of people to the state, as a major reason for continued regional employment and economic growth.
Eric Wolf of Excel Construction; Kash Fallahzadeh of FH Construction; Adele Stone of Buchanan Ingersoll & Rooney PC; Brian DePotter of FirstPointe Advisors
“In 2022, Florida came in first across the United States in terms of population growth,” Chang noted. “Overall, we’ve added 4.5 million jobs, the unemployment rate is at a 50-year low, there are 10.5 million job openings, wages are up 4.6%, retail sales are up 3% and the 10-year treasury yield is at 3.5%. Those are solid numbers, and while interest rates have placed our industry into a stall, we seem to be leaning more towards ‘slowcession,’ than an actual recession, and here in South Florida, it may not even be noticed.”
Another heated topic that caught the ears of listeners was related to insurance market forecasts and rate hikes.
Harley R. Miller of Miller Construction Company and Swathi Ranieri of American National Bank
“The Florida insurance market is in a perfect storm right now, with carriers refusing to write business here, but the state has been doing a tremendous job getting in front of the legal issues to curb the problem,” Allen said. “We are hoping that in the absence of a major hurricane or world crisis similar to the war in Ukraine, and with a reduction in inflation, Florida’s attractiveness will improve, and prices will eventually begin to come back down.”
Understanding America’s labor shortage across all sectors, and why workforce participation remains below pre-pandemic levels, was also of particular interest to attendees.
Brian DePotter of FirstPointe Advisors; Sandra Pabon of Itasca Construction Associates; Lilly Avon
According to Chang, “We have more than four million open jobs without employees to fill them, which is due in part to several factors including early retirement of the baby boomer generation brought on by the pandemic, dual income families opting to move out of the urban core so that one family member can stay home and care for children, continued fears of COVID and a significant drop in immigrant workers relocating to the United States. Prior to 2016, we welcomed more than 1.2 million immigrant workers each year, and by 2020 that number had dropped to 20,000 people.”
For more information about NAIOP South Florida and upcoming events, visit naiopsfl.org.
Panelists Ryan Nee of Marcus & Millichap; John Allen of Chronos Underwriters; Brian DePotter Property Tax FirstPointe Advisors; Sandra Pabon of Itasca Construction; John Chang of Marcus & Millichap; Dan Cioci of Risk Strategies
About NAIOP South Florida:
NAIOP South Florida is the largest chapter of NAIOP in the state. With more than 350 members representing constituents in Miami-Dade, Broward, Palm Beach, Martin and St. Lucie counties, the chapter is the leading commercial real estate development organization in the region. NAIOP supports commercial real estate professionals with advocacy, education and business opportunities and connects its members through a powerful North American network. For more information, visit naiopsfl.org.
About NAIOP:
NAIOP, the Commercial Real Estate Development Association, is the leading organization for developers, owners and related professionals in office, industrial, retail and mixed-use real estate. NAIOP comprises 20,000 plus members in North America. NAIOP advances responsible commercial real estate development and advocates for effective public policy. For more information, visit naiop.org.
(L to R; photos courtesy of NAIOP South Florida)
