State retail vacancies plunge as new residents boost demand
Florida’s commercial real estate sector is experiencing an upswing in retail as a wave of financial and tech executives relocating since the pandemic continues to reshape the state’s urban and economic landscape.
According to real estate leaders, this influx of high-earning professionals is transforming cities like West Palm Beach into year-round business and lifestyle hubs.
“With nearly 90,000 new residents added to Palm Beach County in a few years, the city’s evolution from seasonal resort town to year-round city has been swift and strategic,” said Ken Himmel, president of Related Ross, a key player in South Florida’s commercial real estate development.
Himmel attributes the growing demand for retail space to the “deliberate and sustained migration of high-net-worth individuals, financial executives, and tech leaders” since the onset of the COVID-19 pandemic in 2020.
Nowhere is the impact more visible than in West Palm Beach, where retail vacancies are virtually nonexistent in 2024 and occupancy rates are nearing all-time highs. At CityPlace, a flagship mixed-use neighborhood in the city, over 125,000 square feet of retail space is being added to accommodate brands such as Equinox, Alo, Reformation, Bluemercury, and Crate & Barrel.
Himmel said the integrated development model is playing a crucial role in sustaining the demand.
“As top investment firms and institutions open offices nearby, they bring with them a highly educated and well-compensated population seeking elevated lifestyle experiences,” he told Fox Business. “That demand is being met by integrated, mixed-use developments like CityPlace, which combines office, residential, and commercial in a highly walkable district.”
This built-in foot traffic is helping maintain retail vacancy rates below 3%, even as additional square footage comes online.
Florida’s favorable tax structure, population growth, and cost of living advantages continue to attract both individuals and businesses. Commercial brokerage firm Steinbauer Associates, Inc. called the state’s environment “highly profitable” for investors, pointing to sustained demand in key real estate sectors.
“As financial services and innovation hubs take root in the city, retail is rising in parallel and fueling a self-sustaining cycle of growth and demand that continues to accelerate,” Himmel said.
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Retail momentum is building across the state, according to Kelly Lyles, of KL International Realty, who pointed to examples like Foot Locker relocating from New York City to St. Petersburg.
“With companies like Foot Locker relocating from NYC to St. Petersburg, many retailers are looking to increase their footprint throughout the Sunshine State,” Lyles said. “Florida is a diverse state with a growing population and has always been a place where people looked to relocate. However, nowadays, low taxes and lower cost of living are driving both consumers and retailers here.”
Even longtime Florida staples like Publix are expanding, with the grocer planning to open a 50,000-square-foot supermarket in Panama City Beach.
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