2023 Economic Outlook
Southeast Florida's economic forecast for 2023
Regional business leaders talk about the outlook for the year ahead, plus demographics and statistics
Perspectives on the Year Ahead
President/CEO, Business Development Board of Palm Beach County
“Most people don’t realize the University of Florida has made two big plays in our county. The University of Florida is going to take 12 acres in the heart of downtown West Palm Beach for a graduate school in data analytics, cybersecurity, AI, aviation and aerospace. The second area the University of Florida has taken over is the Scripps Research Institute — to really build out that cluster the way we envisioned in 2004.
The continuation of Wall Street South and financial services is another area as well as our continued development of our knowledge and information-based companies — aviation, technology, logistics and corporate headquarters.
We’re focused on our workforce infrastructure issues. Out of all the people who have moved out of the Northeast to Florida, the greatest switch of license plates has been in Palm Beach County. They’re increasing the need for public schools and private schools. While the C-suite may send their kids to private school, the mid-level managers that are coming will be sending their kids to public schools.
How do we enhance the quality of our public education system? How do we address transportation?
Housing is an issue.
A very exciting market, very exciting times. There are 1.5 million square feet of new office space in the works — more than in the history of the city. Some has broken ground. Some has not. In the light industrial market, 1 million square feet are being built. For Palm Beach County, that’s still a lot of construction.”
Vice President of Operations, Modern Restaurant Group, Delray Beach
- GROWTH: Modern Restaurant Group’s El Camino restaurants are in Delray Beach, Fort Lauderdale and West Palm Beach. “It’s Mexican soul food. We’re a quality-driven brand. A complete scratch kitchen, 20 or 30 different kinds of chiles from Mexico. In times of inflation and rising costs and prices, you can go out for a fantastic meal and enjoy yourself for under $20 a person. We range from 200 to 300 employees per large location, such as Las Olas, West Palm and Boca. We see over 50,000 guests a month on average (including bar guests). Sometimes that goes north to 70,000. West Palm Beach opened July 1. We were more than thrilled. To do the kind of numbers we were doing — $1 million a month in the middle of the summer — even through what traditionally are the slower months in Florida.”
- WORKFORCE: “The expansion is continuing into Boca Raton in the third quarter. We’re opening the same time as four other restaurants. The job market there is definitely going to be more competitive. Like anything else, you get what you pay for. We think long-term retention. Making sure through these times we’re supporting our staff. You have to be an employer of choice. The tip employees at our restaurants do really well.”
President, Minto Communities USA, Coconut Creek
- INFLATION: “Based on our sold backlog, this year will probably be our best year for closings, and we’ve been down here over 40 years. We’re going to pull back sales about 20% from where we were (in 2022.) We can only do so many homes because of supply chain issues and labor and rising interest rates. We were not able to get windows on houses all year. We can’t get appliances in many communities. At Latitude Margaritaville — we have one in Daytona Beach and one in Panama City Beach — we are seeing more cash buyers. Where we typically have 35% to 40% cash buyers, in the last six months it’s been 60% cash buyers.”
- HOME PRICES: “Unfortunately, the cost of building a home has gone up $40,000 to $50,000 in the last year. Everything from labor to materials and supply chain issues. We’ve countered that by introducing a townhouse product (at Westlake), which came in at a lower price point. We’re in design on a more affordable product in the mid-$300,000s. In Naples, we introduced our cottage product, which is a bit smaller and more affordable, and that has taken off very well. It’s starting in the $400,000s. We have seen a bit of a decline in the options people are buying — maybe reconsidering a pool. The price of pools right now is just insane.”
- RISING INTEREST RATES: “In our traditional neighborhoods, Westlake (in Palm Beach County) and Isles of Collier Preserve (in Collier County), we’ve done quite well. People are working with mortgage lenders to get the best rates they can. I don’t know at what point, psychologically, people put a pause on it.”
- HIRING OR FIRING? “We’re probably going to be adding at least 10%, which is a little over 30 people, in 2023 to deal with our volume. Especially in today’s market, we need a lot of field superintendents to manage the process. We’re expanding into Texas with our Latitude Margaritaville brand in 2023.”
Partner, Norwest Equity Partners, West Palm Beach
- OPPORTUNITIES: “We’re a private equity firm. We invest broadly in mid-market companies. Most of the time we’re evaluating business services, consumer products and services, industrials and agriculture sectors. Opportunities in service-related businesses continue to be strong.”
- MOVING TO FLORIDA: “We’ve had a presence here since 2019. We spent a fair amount of time thinking through where would be a good place to build a second office. We did a lot of work analyzing the demographics and growth of the various regions, and Florida became the state at the front of the pack. From a personal perspective, moving down to Florida from New York was not a difficult decision. I have a young family, and we love the outdoor year-round family lifestyle down here. Our office was able to stay open throughout the pandemic, and we didn’t miss a beat. We now have a team of 15 people based in West Palm Beach. My kids were able to stay in school, and everything carried on like normal.”
- RISING INTEREST RATES: “Obviously, the level of deal activity has been up significantly until earlier this year (2022), and part of the concern there is the macro and interest rate environment, which has slowed things down. Many of the businesses we’re seeing in Florida, however, have been more resilient due to the localized growth trends.”
- GROWTH: “The reality is there’s a likelihood of a recession ahead. Having said that, we have a strong portfolio of companies that is very diversified. The fundamentals of all our businesses are very strong. We’re continuing to build on our existing portfolio looking at a number of add-ons and continuing to invest in our businesses. If I look out my window, the number of cranes visible speaks to the level of investment and development here, which is exciting in itself.”
Economic Development Opportunities in 2023 …
Executive Vice President, Greater Fort Lauderdale Alliance
“Our economy has been strong, and we don’t see that changing in ’23. We have 25 active projects in the pipeline right now.
Aviation, technology, financial services, advanced manufacturing and marine industries — all of those have seen job growth in the last year and certainly in the last two years. Tourism has really been strong. That has been helped by the ability of foreign travelers to come back in.
We attracted a lot of tech workers to South Florida who were able to work anywhere. Our No. 1 job category in terms of employees is professional and business services and corporate and regional headquarter jobs. That sector is 167,000 employees in Broward. Out of that, 79,000 employees are in corporate, regional and division headquarters.
We’ve got about half our advertising budget going now toward attracting talent to the area in our targeted industries. We also have a director of talent recruitment and education. They were recently at Georgia Tech and Morehouse College in Atlanta meeting with students at career fairs, getting their resumes, bringing them back and posting them on the South Florida TechGateway website.
I think if there’s a concern it would be the interest rates. It will affect different industries in different ways.”
President, Economic Development Council of St. Lucie County
“From an economic development perspective, we haven’t seen any slowdown. We’re seeing, still, a very strong interest in the distribution/logistics industry sector. We’re seeing a resurgence in small and medium-sized manufacturing. We’re very bullish on manufacturing with more technology-based and advanced manufacturing enterprises.
St. Lucie County is kind of the northern gateway of South Florida. We’ve seen a lot of interest out of South Florida and the Northeast United States about expanding operations and having an additional plant in the operation. They can be anywhere from 150 people and 100,000 to 200,000 square feet.
According to the Florida Department of Economic Opportunity, 61% of our workforce hops in the car every day to work some place else. They’re going to Palm Beach County, up to the Space Coast. They’re going to Orlando, and they’re going to Fort Lauderdale, too.
We’ve been very communicative with Brightline with regard to our intent and interest to have a station in St. Lucie County, particularly downtown Fort Pierce.
We have more housing starts than Palm Beach County. That’s pretty impressive. Housing stock and housing availability are critical to St. Lucie County. This is a high priority along with workforce readiness.
For 2022, we expected about 5 million square feet of new warehouse/ industrial facilities. All that has happened. We anticipate that there could be another 5 million square feet going up in the next 12 to 25 months. Literally millions of square feet are underway. It’s really phenomenal. We are now on the map with regard to industrial facilities and distribution.”
President/CEO, Marine Bank & Trust, Vero Beach; Chair, Florida Bankers Association
- GROWTH: “I hear from the bankers that despite all the bad news in the national economy, the miracle of Florida continues. We’re still growing. People are moving here. From our customers, I’m asking all the time and I keep getting, ‘Business is good. I can’t get enough help, and I’m just now starting to get enough supply.’ I talk to my hotel friends, restaurant friends — they’re doing well. The Realtors are telling me the volume is down a little bit, but the demand-supply balance is coming back into a fair balance.”
- WORKFORCE: “For the bank, we’re looking at expanding. We’re looking at opening a new branch some time (in 2023) within the market we serve. The limitation is, can we find good talent? We have had at least four very good bankers at the junior-officer level move out of state because of the housing cost here. When I go into Brevard County, it’s amazing. Florida is doing very well. Brevard County is even better. There’s something going on in Brevard that’s really, really special.”
MAJOR DOWNTOWN DEVELOPMENTS
- Fort Lauderdale Riverwalk: Miami-based Cymbal DLT plans to break ground in the summer on the first phase of its six-acre, billion-dollar downtown Fort Lauderdale Riverwalk waterfront project that includes rental towers, a condo building, hotel, marina and yacht club. First out of the ground will be Riverwalk Raintree Residences, a two-tower rental project of 28 and 29 stories.
- Huizenga Park: The Fort Lauderdale Downtown Development Authority expects to break ground on a $15-million to $20-million “reimagined” Huizenga Park on Las Olas, complete with “uniquely programmed outdoor rooms” for leisure, dining, physical activity and events.
- Baptist Health IcePlex: Just beyond the northern edge of downtown, the NHL Florida Panthers will open the Baptist Health IcePlex as the team renovates and expands the War Memorial Auditorium in Fort Lauderdale, a $65-million to $70-million project at Holiday Park. The IcePlex will serve as the Panthers practice rink and as a community and youth hockey rink while adding another live music venue.
- FAT Village: Real estate firm Hines’ is constructing an office building totaling 350,000 square feet as part of its and Urban Street’s 5.6-acre office, retail, residential project in northern downtown in an arts-oriented district called FAT Village (as in Flagler, Art and Technology or Food, Art and Technology). Completion of the office building is scheduled for 2025.
- Residences at Mandarin Oriental: The Residences at Mandarin Oriental, Boca Raton’s first branded luxury residence, and 164-room Mandarin Hotel open this year.
- Gulfstream Hotel: St. Louis-based developer Restoration St. Louis this year is scheduled to renovate the historic Gulfstream Hotel in downtown Lake Worth Beach. Plans call for restoring 90 rooms at the hotel, which has been closed since 2005, and building an annex with 50 more rooms and 85 luxury apartments on the 1.8-acre site.
- 515 Fern: Related Cos.’ 25-story 515 Fern, at 456,000 square feet the largest downtown West Palm Beach office building, gets underway this year. It will take Related to more than 2 million square feet of office space, the largest owner-developer of office space in the city. Completion is scheduled for 2025. Related’s 277,000-sq.-ft. One Flagler office tower, meanwhile, is scheduled to be done in 2024.
- Flagler Station: Late in 2022, HTG and the city of West Palm Beach and Palm Beach County completed the $33-million, 94-unit Flagler Station affordable and mixed-income development in downtown West Palm Beach.
- Hallandale Beach-based Tienda Pago raised $12 million from Women’s World Banking Asset Management, IDC Ventures and others as the startup seeks to supply credit to convenience stores in developing regions so the stores can purchase merchandise from suppliers in Tienda Pago’s network for sale to convenience store customers.
- Port Everglades this year will join Port Canaveral as a homeport for Walt Disney’s cruise line.
- Donna Bean, human resources vice president for medical device company Terumo Aortic in Sunrise, became chair of the South Florida Manufacturers Association board.
- Nova Southeastern University will replace the former Miami Dolphins training complex on its Davie campus with a $56-million, 107,000-sq.-ft. simulation complex for advanced training for students in all health care disciplines. The SimCom is scheduled to open in 2024.
INDIAN RIVER COUNTY
- Vero Beach voters in a referendum endorsed city plans to lease the city’s 38-acre Three Corners site, which formerly housed the city’s power plant, to a developer for a potential hotel, marina and recreational uses.
- County voters approved a property-tax increase to fund the purchase of environmentally sensitive land.
- Florida Forever has purchased conservation easements that will protect 3,600 acres of the Abington Preserve in a $7.75-million deal brokered by Dean Saunders, founder and managing director of Lakeland-based SVN | Saunders Ralston Dantzler. The land is home to diverse species, such as the Florida Grasshopper Sparrow, sandhill cranes, gopher tortoises, wood storks and the crested caracara. The easements will ensure the land will remain in its natural state in perpetuity.
- Financial journalist Knight Kiplinger chose Mattamy Homes as master developer of Newfield, a 4,000-home development with a town center and 2,300 acres of open space, including a 70-acre working farm in western Palm City in Martin County. The Kiplinger family has owned the site for more than 40 years.
- Ashley Capital’s Sunrise Grove Commerce Center, 1,600 acres entitled for more than 5 million square feet of industrial space along I-95 in Martin County, is in design for water and wastewater utility service from the city of Port St. Lucie. Ashley’s Martin Commerce Park, 200 acres also along I-95, meanwhile, is working with Martin County on utility service.
PALM BEACH COUNTY
- Equestrian event impresario Mark Bellissimo wants to build a riding-centric development with a hotel, 270 condos, 30 single-family homes and commercial space in one project and another 197 luxury homes in another, both in Wellington.
- KruseCom, an IT asset management company, relocated to West Palm Beach from New Jersey creating 30 jobs paying $80,000 on average.
- Philanthropists Holli Rockwell Trubinsky and her husband, Joseph Trubinsky, donated $10 million to Florida Atlantic University to establish the Holli Rockwell Trubinsky Eminent Dean in Nursing.
- FAU renamed its basketball and volleyball arena the Eleanor R. Baldwin Arena. Baldwin committed to donating $7.5 million to FAU.
ST. LUCIE COUNTY
- St. Lucie has nine industrial parks totaling more than 6.4 million square feet of space recently completed, under construction or fully permitted.
- King’s Landing, an Audubon Development waterfront project in Fort Pierce, will include a hotel and 114 residences, retail and restaurants.