South Florida business boom expected to outlive pandemic-era boost
NAPLES, Florida — Florida was the top destination for people fleeing Northern states for the South during the pandemic, bringing a big business boost. Three years in, that boom is extending even as storm clouds form over the national economy.
Population data released late last year from the U.S. Census Bureau showed that Florida is growing quicker than any other state, with its population growing nearly 2% from 2021 to 2022 alone. That figure increases to 3.3% from April 2020 (right around when the pandemic took hold) to July of last year — representing more than 700,000 new residents who call the Sunshine State home.
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A big chunk of that growth was in South Florida, in places like Miami and Fort Lauderdale, but also across the state in Collier and Lee counties, which are home to fast-growing enclaves like Naples and Fort Myers. As those areas fill up, businesses have struggled to keep up with the red-hot demand. Companies in South Florida are still working to hire and retain workers even as labor markets in other states show signs of cooling and economists fear a downturn.
Steve Camposano is the owner of High Velocity Category 5 Hurricane Protection, a Naples-based company that provides motorized hurricane shutters, awnings, screen and interior coverings, and hurricane windows. The business is very responsive to population growth and does about half of its business in new construction and half in retrofitting existing buildings and homes.
“Business is booming,” Camposano, who started his business more than two decades ago, told the Washington Examiner.
He said demand for his company has exploded over the last three years as people flock to southwest Florida and it isn’t abating. His company faced a backlog of several million dollars at the start of the pandemic that has now grown to $5 million.
The national economy faces a major test this year as the Federal Reserve tightens monetary policy in an effort to bring down the inflation that has wracked the country for the past two years. Many economists fear that the Fed will tip the country into recession as it raises interest rates. Already, the Fed’s rate hikes have translated into sharply higher mortgage rates and thrust the housing market into what the industry has described as a recession — but Florida has defied that trend.
But Camposano said he thinks southwest Florida will evade broader economic fallout as well.
“There is no question that it will have very little effect on business in southwest Florida proper, only because the amount of construction versus the amount of paid-for condominiums that haven’t been built yet is unprecedented,” he said.
While the reasons for moving to places like Naples and Miami are varied, many relocated because of the pandemic. The pandemic offered two new realities for movers. The first was the sharp contrast to many of the more stringent lockdown and business restrictions imposed by states in the Northeast and West, and the second was the proliferation of remote work, which allowed would-be Florida residents to keep their current jobs in corporate bastions like New York and Chicago while living and working in Florida, which has a much more favorable tax environment and a coastal lifestyle that can be enjoyed year-round without a single snowflake.
Vikki Salese, who works in real estate, moved to Florida from Connecticut in July 2021, just over a year after the pandemic began. Her husband, who works in finance, was able to work remotely while one of her sons was able to attend school in person in Florida after not being allowed into school up north, something that she said hampered his education. The family immediately noticed just how different the business environment was in Florida than elsewhere — people weren’t hunkering inside and were instead going out and spending their money.
Down in the Sunshine State, she said, it felt like her family was in pre-pandemic times and business was thriving.
People were going to restaurants, people were going out more,” Salese told the Washinton Examiner, noting that in Connecticut at the time, people weren’t socializing as much, and major events like graduation parties weren’t happening. Certain businesses, such as movie theaters, remained shuttered or at reduced capacity as her family made the move south.
In Florida, though, “it was just like old times, I would say, like normal times,” she said. “We never had a problem going into a restaurant; we didn’t see as many people masking. We saw people congregating. Churches were busy; supermarkets were full.”
Ted Blankenship, a member of the Naples City Council, told the Washington Examiner that the growth South Florida has experienced since the start of the pandemic, and is still experiencing, only compounded the growth over the longer term.
From April 2020 to July of last year alone, the population of Collier County grew by about 6%. In the past two decades, the county has recorded a 58% increase in residents.
“The area was already growing, but now it just really accelerated because a lot of people realized they could work remotely, and a lot of people who maybe wanted to live in Florida someday decided they could live there now and work remotely,” he said.
One reason the business growth is expected to continue in the area even when other parts of the country start floundering is “the word-of-mouth effect,” Blankenship said. He noted that many people who have moved down recently end up enticing their friends and colleagues from up North to join and relocate.
Local business owner Marilyn Hellman has seen the growth firsthand.
Hellman is the owner of Marilyn’s Distinctive European Fashion on Fifth Avenue South in Naples. She has been in business for 14 years, selling an array of European shoes, clothing, and accessories. On a sunny Monday morning, she offered guests help in choosing outfits.
She told the Washington Examiner that she started her business after working in the corporate world for nearly three decades.
“We were starving to death; I felt that our fashion here was very dull,” she said of her inspiration to bring haute European clothing stateside.
Her store was in a smaller location when she first started out but has expanded greatly alongside the population of a now-bustling downtown Naples. While she started out just selling shoes and hats, the store now stocks much more. She even has her own European clothing line, traveling across the Atlantic for business several weeks per year. She described the increase in population and visitors to the area since she started as “tremendous.”
Many of Hellman’s clientele is associated with the country club scene in the area. She said before the pandemic, clubs were looking for new members, but now they are packed, and it’s hard to get a membership.
Hellman said she expects business to pick up even as the pandemic fades into the rear-view mirror. Her online business has also been expanding but still includes a personal touch. Hellman’s employee base has more than doubled in recent years, and she is still looking to hire.
The business boom in Florida is a serious consideration in national politics. Gov. Ron DeSantis (R-FL), who is seen as a contender for the GOP presidential election, alongside fellow Florida resident and former President Donald Trump, has repeatedly touted the bustling business environment as proof of his leadership.
DeSantis last month delivered his first State of the State address since being handily reelected. The governor addressed the state’s economy just a few sentences into the speech, which was closely watched given his possible presidential ambitions.
“We rank No. 1 in the nation for new business formations. We are No. 1 in economic growth among large states. Florida has more people employed today than before the pandemic. Our unemployment rate is one of the lowest on record, and it is significantly lower than the national average,” DeSantis said. “And we do that with having the lowest per capita state tax and lowest per capita state debt burdens amongst all large states.”
And not only are existing businesses like Camposano’s company or Hellman’s store growing and expanding thanks to the influx of residents, but new businesses are forming, and out-of-state corporations are flocking in droves to Florida, adding to the state’s robust economic engine.
Out of the 5.8 million new business applications filed across the country from January 2021 to January 2022, a whopping 12% were in Florida, according to the U.S. Census Bureau.
Miami has also been a hot place for major companies to relocate their headquarters. Billionaire hedge fund boss Ken Griffin, citing a better corporate environment, announced last year that he was moving his massive firm Citadel from Chicago to Florida.
“Chicago will continue to be important to the future of Citadel, as many of our colleagues have deep ties to Illinois,” Griffin wrote in a letter to staff. “Over the past year, however, many of our Chicago teams have asked to relocate to Miami, New York, and our other offices around the world.”
The commercial real estate market has been humming along thanks to its ability to attract business leaders like Griffin. Both Miami and the Fort Myers area have been outperforming the rest of the country, according to the National Association of Realtors.
In Miami in the third quarter of last year, market rent growth for office space rose 8.3% on an annual basis, more than the third quarter of 2021. Additionally, the average rent price rose from $41 per square foot during the third quarter of 2021 to $45 a year later. Retail and industrial rental space also increased in price during that same period.
That’s a stark contrast to, for instance, the San Jose area of California, where the opposite was true. Market rent growth fell by 1.1% in the third quarter of last year on an annual basis, and the average rent price per square foot of space tumbled from $63 per square foot during the third quarter of 2021 to $62 a year later. Market rent for retail space also remained stagnant.
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Some big tech firms have also moved to Miami, which Mayor Francis Suarez has been pushing to become a new tech hub akin to California’s Silicon Valley. For instance, global system integrator LeverX announced the relocation of its corporate headquarters to Miami earlier this year.
“Florida was ranked #1 for new tech business establishments in 2021 by CompTIA, and we only expect to see more growth occur in the years to come,” Laura DiBella, Florida secretary of commerce and president and CEO of Enterprise Florida, said in a statement.
Source: South Florida business boom expected to outlive pandemic-era boost