Florida’s demographic gravity continues to pull capital south. Population growth near +2% (≈467,000 people) in 2023 cemented the state as a magnet for both investors and residents. By mid-2024, Florida and Texas accounted for nearly one-third of all U.S. population gains — a scale that keeps housing, retail, and logistics developers in expansion mode. The cycle is defined less by yield chasing and more by conviction: capital following enduring migration and income growth patterns rather than short-term rate relief.

Demographics remain Florida’s most reliable financing partner. Net migration of nearly half a million people in one year translates to roughly 180,000 new households needing space and services. Markets like Orlando, Tampa, and Jacksonville anchor the next ring of expansion beyond South Florida’s coastal cores. Developers are tracking permit data showing multifamily starts still 20% above pre-pandemic averages. In turn, capital allocators from New York, Toronto, and Singapore view Florida as a durable growth hedge rather than a speculative bet. Population flow has become the new underwriting covenant.

TA Realty’s $193 M re-acquisition of a Palm Beach Gardens community and Eastham Capital’s $47.5 M sale of “The Monroe” in Tallahassee illustrate pricing discipline at work. Even with debt costs near 7%, buyers are paying ~$165 K per unit for stabilized assets when rents show material growth. Renovations that lifted rents ≈45% proved that value-add still translates to yield creation if occupancy remains mid-90%. On balance, Florida’s multifamily cap rates have expanded only ~30 bps in two years — a remarkably shallow shift for a high-beta Sunbelt market.

In South Florida, presales have become the new capital stack. Witkoff Group’s $200 M in pre-construction contracts at Ocean Terrace — before marketing formally began — demonstrates how developers use buyer equity to offset financing volatility. Half of the units were sold via private channels to domestic and Latin American investors. For lenders, such presale ratios now serve as de facto credit enhancement. Still, developers face construction costs ≈ 30% above 2019 levels, making front-loaded sales a necessity rather than luxury.

Florida’s retail sector is a lesson in scarcity pricing. Miami’s vacancy at ~2.8% and statewide centers 95%+ leased reflect a virtually no-supply environment. Grocery-anchored assets trade near 6% cap rates, while open-air centers in suburban nodes often compress below 5.5%. Rent growth is tracking ~4% YoY, and institutional buyers like Kimco and Regency are re-entering Florida markets after pauses in 2023. Nonetheless, tenant demand is skewed toward service and medical retail — a structural shift likely to sustain tight occupancy.

Despite higher rates, Florida’s pricing resilience is anchored by capital weight. Blackstone noted a 48% YoY boost to Q3 earnings partly from Florida sales, highlighting how liquidity in growth markets offsets pressure elsewhere. Private credit funds and regional banks are funding transactions with LTVs below 65% but minimal discounts. In practice, Florida’s markets are defining a new risk-pricing paradox: higher base rates, lower risk premia. Yield spread to the 10-year Treasury has narrowed to ~180 bps, a testament to enduring confidence.

For now, Florida remains a net beneficiary of macro discipline. Population inflows, tight retail space, and rising tenant incomes are counter-balancing debt costs. Yet risks are not trivial: insurance premiums have climbed 20–30% YoY in some coastal counties, and municipal infrastructure spending lags migration. Institutional allocators are testing depth by rotating out of over-valued office and into Florida residential and necessity retail. If the Fed maintains its pause through mid-2026, Florida could see a new wave of recapitalizations at scale — proof that discipline and demographics can coexist in the same cycle.