Opportunity Zones in Miami are heating up. Part of the 2017 Tax Cuts and Job Act, Opportunity Zones are designated areas across the states where that offer investors and developers tax breaks on capital gains. With over $6 trillion in unrealized capital gains in the United States, the potential market for reinvestment is staggering.
As the second most populated city in Florida and the fourth largest urban area in the nation, Miami is full of possibility. Below, we explore Miami’s Opportunity Zone investments based on asset class in Miami-Dade, Broward and Palm Beach Counties. Using Reonomy’s robust sales data in conjunction with city-specific trends, we asses Miami’s Opportunity Zone parcel breakdown and sales data to uncover investment opportunities.
With the city of Miami in the county seat, Miami-Dade County has a population of 2.5 million in over 2,000 square miles. The county’s economy is flourishing; between population growth, an attractive tourism industry, and strong employment rates, Miami-Dade is an epicenter for advancement. And while other cities are struggling with retail, in Miami-Date retail is particularly thriving.
Currently, there is over 2.9 million square feet (sf) in retail space under construction throughout South Florida. In Miami-Dade, specifically, plans have been approved to develop the 6.2 million sf American Dream shopping mall—the largest in North America. Additionally, the mega mixed-used space, the Miami WorldCenter, is slated to finish construction in Spring 2019. This promises over 300,000 sf in retail space, 500,000 sf in office space, and 500,000 sf in hospitality space.
According to Reonomy data, there are over 1,133 different mixed-use assets in Miami-Dade’s Opportunity Zones, as well as 110 retail spaces. Data also shows over 4,000 general commercial real estate assets. Since asset classes are determined on a county-by-county basis, this could include a variety of properties that might be considered “retail” or “mixed-use” elsewhere. With these industries advancing in Miami-Dade County, it might be a prime time to consider investing in these assets within the area’s designated Opportunity Zones.
Smaller than Miami-Dade, Broward County sits north of Miami-Dade and consists of big-name beach towns, like Fort Lauderdale, Pompano Beach, and Hollywood. The county’s population is growing; over the next five years, Broward County expects more than 167,000 people move to the area and increase the total population to 2.1 million. This influx in population is positively impacting the local multifamily market, with over 16 new apartment buildings (5,500 individual units) currently under construction throughout the county.
Broward County’s Opportunity Zones appear to be stocked with a myriad of multifamily assets for consideration. Our data shows, of the area’s entire Opportunity Zone parcel breakdown, nearly half (41.8 percent) are classified as multifamily properties. Data also indicates that nearly 20 percent of 2018’s entire commercial sales were multifamily, supporting the Broward’s burgeoning multifamily market.
Palm Beach County:
Farther north of Miami-Dade and Broward counties is Palm Beach County. The third-largest in Florida, Palm Beach County is also one of the wealthiest areas in the nation. It’s one of only 22 counties throughout the country to earn the highest-possible bond rating (AAA) and has a per capita personal income 50 percent higher than the state and national averages.
Investors and developers are already paying attention to Palm Beach County’s promising economy. Hospitality is especially growing, with employment rates up from last year by 4 percent and hotel occupancy rates at a three-year high at 88.6 percent. With more tourists flocking to Palm Beach, investors and developers should consider investing in one of the 9,938 properties or plots in the county’s Opportunity Zones to capitalize on incoming business.
Reonomy data indicates a large portion of vacant land parcels in Palm Beach County’s Opportunity Zones. At 39.5 percent, vacant land makes up the majority of total parcels, with multifamily coming in second at 29.4 percent. For developers looking to build, Palm Beach County offers various opportunities in these incentivized areas. Whether they want to capitalize on the tourism boom through hospitality space, retail, or mixed-use space, these land plots are ready for lucrative development.
Ready to find property in Miami’s Opportunity Zones? Learn more about the market’s only Opportunity Zone search feature, here.