Interview: Karen Johnson

Key role

Local realtors are pivotal to the economic viability of communities

How would you characterize your group’s impact on the region last year? In 2020, our local realtors played a key role in maintaining economic viability in our communities. The average home sale infused $90,300 into our local Florida economies. In 2020, the real estate industry accounted for 23% of the gross state product in Florida. This was a key factor in our local communities continuing to have resources to provide much needed assistance and services to those who otherwise would not have been able to sustain their families and businesses during these difficult times.

In 1Q21, we saw record sales in Broward communities. Buyers from all over the world became more focused on purchasing real estate in South Florida, and Broward County was one of the centers of that focus. The world at large quickly became increasingly comfortable with the new virtual way of doing business, opening up opportunities for purchasers to acquire real estate outside of their local areas. 2020 was an incredibly strong year for the real estate market. Although inventory is lower by over 58% in 2021 year-on-year, volume has increased by 75%. This is always a good indicator that prices are going to rise and indeed they have. Median prices have increased over 15.5% and the average price rose over 33% from the same time last year.

What issues is your association advocating for? Advocacy is one of our main objectives. We are among the largest associations in the country and our voices are huge when shaping legislation. One of the reasons we were deemed essential is because of our political action and our preponderant role in the economy. One of the top issues we are focusing on is Senate Bill 2512, the Housing Trust Fund, relating to the documentary stamp tax distribution. What we have been advocating for is a reallocation of that resource from the general funds toward vital infrastructure needs — water, affordable housing, to name a few. A recent win includes the signing of a business rent tax by Gov. DeSantis. Florida is the only state in the country that has a tax on business rents, directed at businesses that rent a commercial space. It was reduced from 5.5% to 2%. That means companies relocating to Florida will not have this additional tax as soon as they set up shop. Small businesses can concentrate on expanding and employ more people instead of paying this tax. Lacking a state tax, we know money has to come from somewhere. This is why we are going to have a sales tax bill to ensure online retailers collect the required sales tax on purchases made by Floridians. This will result in an estimated $1 billion a year in revenue for the state.

Karen Johnson

President – Broward, Palm Beaches & St. Lucie Realtors®

David Cohen

Executive Vice President – AKAM

Residential real estate activity has picked up significantly. While economic and financial uncertainty still looms, market conditions have improved and these all point to a return to a sense of normalcy. The continuously increasing demand for housing here in South Florida specifically is due to various factors, including financial and overall lifestyle benefits. We are seeing a huge influx of second-home buyers and an even larger number of buyers migrating from key crossover markets like New York, looking to make South Florida their primary residence. We are also seeing a significant pool of millennials relocating from the Northeast to escape the colder climates. Major companies have relocated to South Florida within the last few months as well, which increases the demand and appeal.

( ) according to Cushman & Wakefield, with 1.8 million projects underway. Even though Port Everglades’ cruise under construction. The new inventory helped push activity came to a screeching halt from the outset of vacancy rates up to 6.9% in 1Q21 while the year-to-date the pandemic, the port is busier than ever moving net absorption totaled 1.1 million square feet. more than 1 million TEUs per year, a sign of the times Underpinning all this is the explosion in e-commerce as in e-commerce and a harbinger of things to come in home-bound residents went online in droves during the industrial. Moreover, a Blackstone affiliate bought pandemic. It’s a trend most industry observers like Alex $46 million-worth of industrial properties from Elion Rich, founder and president of Rich Commercial Group, Partners in Broward County: three warehouses totaling believe is here to stay. “We’ve been in the pandemic 66,000 square feet, an industrial building offering long enough that people’s habits 43,000 square feet and another have changed” Rich told Invest:. building with more than 41,000 “Consumers spent $900 billion more in 2020 on e-commerce than I think square feet. Yet, Broward County is falling victim to its own success they did in the previous two years. there’s plenty of and attraction. It now needs to be Once a trend like that starts and becomes a habit, it’s here to stay. opportunity in strategic over which industrial projects it prioritizes considering Another factor with industrial is the municipalities. There’s a very Downtown and developable land is running scarce. There were only close to finite amount of land where you the perimeters. 400 acres left as of December can get industrial developments 2020. Of course, if builders can’t approved. No one wants a Steve Hudson Hudson Capital Group build out, they’ll build up. “The warehouse next to their home so zoning in Fort Lauderdale and the there’s a supply constraint. Of all master plan calls for the density the asset classes within commercial real estate, we’re to be built in the Downtown Core, creating a vertical most bullish on industrial for the long term.” city. Moving away from the core the density changes, Despite demand, average rent prices have remained as it should. I think there’s plenty of opportunity in relatively stable in the past year, standing at $9.98 per Downtown and the perimeters with some exciting square foot at the end of 1Q21, up 2.2% year-over-year, developments happening south of the New River. according to Cushman & Wakefield. It depends on what your goals are and what projects According to CommercialEdge data, Fort Lauderdale you want to do. We have a lot of different investments ranks third in the Sunshine State in terms of square feet in retail, industrial and office space, with most of our of industrial development under construction and 11 investments in South Florida,” said Steve Hudson,