- Capital flows are shifting as wealth and businesses exit high-tax states for South Florida.
- Starwood Capital sees new deal opportunities in office and multifamily despite industry pressure.
- South Florida’s infrastructure gaps, especially in schools and marinas, pose growth challenges.
- Office pricing stabilizes in strong markets while multifamily faces supply-driven concessions.
Capital Flows Rebalance
CoStar reports that wealth and corporations are leaving high-tax states, reshaping capital flows across the US. Barry Sternlicht, CEO of Starwood Capital Group, highlighted the shift.
Companies continue relocating to South Florida, bringing employees, capital, and new business activity. As a result, demand for office and multifamily properties is increasing. The migration is also driving stronger investment activity across the region.
Office and Multifamily Deals
Sternlicht highlights renewed opportunities in both office and multifamily property. Office values, hit hard during the pandemic, are rebounding in select markets like New York, where pricing has held strong. Meanwhile, hotel demand is also showing signs of recovery as travel activity strengthens and industry fundamentals stabilize. In contrast, a surge of new multifamily supply across the US has led to increased concessions as owners compete for tenants and refinance options grow tighter.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
South Florida’s Growth
South Florida has experienced a surge in corporate relocations, fueling population growth and a strong demand for luxury condominiums and new office space. Sternlicht’s Starwood Capital has expanded its local development pipeline, including the Perigon condo project in Miami Beach and a new partnership on Jupiter Island.
Infrastructure Pressures
Despite momentum, regional infrastructure such as schools and marinas lags behind demand. Sternlicht notes that without faster development of schools, South Florida’s sustained growth could be constrained. Local marinas are also strained, affecting community amenities and the region’s appeal to newcomers.
Why It Matters
Capital flows into office and multifamily continue to follow talent migration from high-tax markets to Sunbelt destinations. Despite industry headwinds, South Florida’s growth endurance is buoyed by favorable tax environments and ongoing investment from major CRE players like Starwood Capital, creating a strong pipeline of deal activity and development projects in the region.
