Event lead. Florida has eliminated its 57-year-old sales tax on commercial leases, effective October 1. For occupiers, that’s an immediate basis-point cut to total occupancy cost—roughly $900 million per year that no longer leaves the P&L—and a structural lift to space demand. For owners, it tightens bid-ask spreads and supports cap-rate compression as investors price a lower gross cost of doing business in the state

By contrast with other gateways, employee visitation is back. Miami sat near 75.8% of 2019 levels in August versus 61.3% nationally—the kind of behavior that supports office absorption and retail footfall. Meanwhile, population inflows remain a tailwind: planners expect ~319,000 net new residents annually over the next five years, even as growth normalizes from the post-pandemic surge. Landlords sell utilization, not opinions. Florida has it.

Cap rates fell ~9 bps in H1’25 on CBRE’s all-property estimate, with sectors moving largely in unison—classic “past-the-peak” behavior. In turn, Florida’s pro-growth policy and migration premium argue for relative outperformance, especially in multifamily and industrial where leasing friction is low. A 25–50 bps tightening from 2024 peaks on prime Florida assets over 12–18 months is now plausible if funding markets remain orderly. Still. Keep exit caps honest in secondary submarkets.

Operating lines aren’t all sunshine. Residential benchmarks show ~30–40% premium inflation since 2022, a signal for broader property programs, while Florida’s surplus lines premiums rose 7.23% in 2024, showing continued pressure in the commercial market. Regulators report early signs of stabilizing reinsurance costs for 2025, but owners should budget defensively and chase engineering credits now. Ultimately, resilience spend beats deductible shock.

Investors price policy. Ending the rent tax—confirmed via HB 7031 and Florida DOR—removes a persistent wedge in gross rents and simplifies lease economics statewide. Pair that with consistently high in-migration and you get tighter spreads for Florida deals versus comparable Midwest assets, visible in recent broker guidance and loan committee marks. Meanwhile, CBRE’s midyear outlook flags gradual yield easing ahead, which supports Florida’s relative bid given its growth optics. For now, discipline—not exuberance—sets the winners.

Expect above-trend leasing in industrial corridors (I-4, South Florida) and steady multifamily in Orlando–Tampa–Miami as new supply burns off. Retail holds low-vacancy equilibrium where rooftops are rising. Office remains bifurcated: best-in-class CBD product should capture relocations and expansions; commodity space faces longer lease-up but benefits from the tax repeal in gross-cost conversations. Underwriting guardrails: (1) Insurance +20–30% buffers with higher wind/flood deductibles; (2) assume flat to –25 bps exit cap on prime, flat to +25 bps elsewhere; (3) rent growth normalization (MF 3–4%, IND ~4–5%, Office 2–3%) with sensitivity cases showing zero compression. Credit remains available, but lenders will reward resilience upgrades and sponsors with expense control playbooks. On balance, Florida stays overweight in core-plus and value-add mandates.