Panama Canal Expansion Will Fuel Commercial Demand In South Florida.
With so much talk about the housing market and whether we’ve hit a bubble, it’s easy to forget about the other side of Real Estate; Commercial.
One can’t help but to notice crane after crane as they drive through downtown Miami on I95 or breeze past the Fort Lauderdale skyline heading to the Airport, it’s impossible to not notice the growth. New construction is happening everywhere and it doesn’t end there.
The recent historic reopening of the Panama Canal expansion is being forecasted to transform world trade again and the fact that the Port of Miami and Ft. Lauderdale’s Port Everglades are closest to the Panama Canal will give South Florida an advantage over other eastern seaboard ports for many reasons.
According to an article published by, Marcus & Millichap, a leading Real Estate Investment firm that recently announced the $11.5 million dollar sale of 2916 North Miami Ave., a 23,490-square-foot corner lot in the Wynwood submarket of Miami, the Panama Canal expansion is projected to significantly impact commercial real estate demand in South Florida. The increased cargo volume will increase demand for all four of the major property types: industrial, office, shopping centers, and apartments.
The good news is that all four of those property types are forecasting to show the most promise for investors this year. In an article published by Realtor Mag, “5 Solid Property Investments This Year” the property types projecting the most profits are:
- Senior Housing
- Student Housing
- Neighborhood Community Centers
And to add to this list, National Real Estate Investor published an article titled, “Investment 2016” it had a total of 7 property types all of the above were mentioned plus two additional:
- Suburban Office
- Street Retail
South Florida is not only on track with the National trend, it also looks to get a major boost from the Panama Canal expansion.
Commercial property investors are projected to see a strong return on investment fueled by three key factors:
- Job growth — More local jobs will power a strong demand for housing and retail properties.
- International economic growth — As the gateway to South America, Florida ports will provide essential infrastructure for that growing region. In addition, special events such as soccer’s World Cup and the Olympics (both slated to be hosted by Brazil in coming years) will create demand spikes that will further increase demand for commercial properties.
- Geographic and industrial zone limitations — South Florida’s limited commercial property supply will also put these properties at a premium. The peninsula not only has limited commercial space because of geographic constraints but also because of zoning restrictions for industrial properties. The value of that land will definitely increase as Panama Canal traffic picks up.
“In anticipation of the coming growth, prudent investors can get ahead of the cycle by investing in these properties now. As demand grows so will rent and therefore prices will also increase, and investors are likely to be in a strong position for good ROI,” says Kirk Felici, first vice president and regional manager at Marcus & Millichap.