With the recent passing of Hurricane Irma over Florida, the State's commercial property sector managed to escape significant damage given the scale and strength of the storm.
According to Spencer Levy, CBRE's Head of Research said, "Florida significantly strengthened its defenses after hits from past major hurricanes, and those improvements were instrumental in helping the state weather this potentially devastating storm," Mr. Levy said. "As a result, damage to Florida commercial real estate is relatively minor outside of the Keys. Demand for apartments and industrial space are expected to increase as the recovery effort progresses. Hotels in all but the hardest-hit areas have reopened, and the remainder aim to return to service before year-end.
"Florida's recovery effort will take time, and short-term disruptions are to be expected. But, overall, Florida's resilient economy and globally renowned tourism industry will help the state recover strongly."
CBRE reports the following Hurricane Irma key takeaways:
Florida's prime office and industrial markets reported minimal impact from Hurricane Irma--mainly temporary power outages, downed trees and minor leakage.
Except for the Florida Keys and certain parts of Jacksonville, flood and wind damage to Florida retail properties was also minimal. Certain retail segments, such as building supplies, food and fuel, should see a significant uptick in sales in the coming months.
Single-family residential properties bore the brunt of Hurricane Irma's destruction, particularly in the south, central and northeast regions of the state. As a result, demand for multifamily properties is expected to increase in the short term.
Hotel properties in the state's major markets have reopened for business, except for many in the Florida Keys. Demand may increase by an average 15% for the next four months as displaced residents, aid workers and construction workers seek accommodations. Longer term, the stigma of the hurricane could affect the state's tourism industry.
Preliminary property loss estimates in Florida from Hurricane Irma, total insured and uninsured loss for both residential and commercial properties, including damage from both flood and wind, is estimated to be between $42.5 billion and $65 billion.
According to the Miami Association of Realtors, Miami's existing condominium sales increased for the second time in three months and $1-million-and-up luxury transactions surged for all properties in July 2017.
According to Zillow, nearly one in 20 residential ZIP codes in the U.S. meets the definition of a $1 Million Neighborhood, meaning at least 10 percent of the homes there are worth seven figures or more.
The Miami Association of Realtors is reporting this week that the Miami residential market posted a robust second quarter as single-family home transactions, single-family luxury sales, median sale prices and dollar volumes all surged.