Miami's economic forecast for 2024

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What’s in Store for 2024

• FINANCE

Jorge Gonzalez
Vice Chairman and CEO, City National Bank, Miami

“As we look ahead to 2024, we believe rates will stabilize and that the Federal Reserve will gradually ease rates to sustain economic growth. We anticipate that Florida’s economy will remain strong and that residents, businesses, and domestic and international capital will continue flowing into the state.

Elevated interest rates have led some borrowers to become more selective with their investment and capital expectations. We are also seeing borrowers putting more equity into their deals, versus what we typically see in low-rate environments. CNB is actively lending across our core business lines, but we are exercising additional caution when it comes to underwriting as we work to ensure our borrowers can carry the higher cost of debt.

CNB’s relationship banking model is tailored to the needs of businesses in the sectors driving Florida’s economy. There are a few business lines that are especially active going into 2024. These include international banking as we see a steady flow of capital into Florida and an uptick in cross-border transactions. Demand for commercial real estate development and investment remains strong, and we continue to deploy capital for well-positioned projects with strong sponsorship teams. Another in-demand segment is banking and lending for condominium associations, which is an area where CNB excels across the state.”

• TOURISM

Karim Alibhai
Founder and Principal, Gencom, Miami

“I predict that we’ll continue to see an uptick of international travelers coming to Miami. Global events such as the Formula 1 Grand Prix, Art Basel and even the World Cup in a few years continue to establish the Magic City as a global destination. This has led to an increase in real estate developments branded by notable flags such as Hyatt, whom we are partnering with for Miami Riverbridge, in addition to others, that will meet demand not only for leisure travel, but also business, to be on par with other top destinations such as New York City, Paris, London and Dubai.”

• AFFORDABLE HOUSING

Anthony De Yurre
Partner, Bilzin Sumberg, Miami

“From very low income to moderate income housing, there has never been such a disparity between supply and demand in Florida. Given the high costs of financing, insurance and construction, the problem is only getting worse. The Live Local Act’s tax and zoning benefits are a big reason why workforce housing deals are moving forward in today’s climate … With Live Local now in effect, we are seeing deals which were previously sidelined coming back to life and that will help ease Florida’s housing crunch over the next few years.”

830 Brickell

It has drawn some of the biggest names in finance and law and opens its doors with 97% of its office space leased. The $235-million, 57-floor glass-wrapped building is the Miami financial district’s first new high-rise in a decade. Designed by the same firm behind the world’s tallest tower, the Burj Khalifa, 830 Brickell will be home to Thoma Bravo, billionaire Ken Griffin’s hedge fund Citadel and Anaplan, a San Francisco software company with 2,000 employees worldwide.

• REAL ESTATE
  

Gregory Freedman
Co-CEO, BH3 Management, Miami

“Generally, we believe that migration patterns will continue and there will be expanded inflows of businesses, people and their capital into the market, which is welcomed and will continue to contribute to the growth of Miami. As it pertains to development, we expect there to be a slowing of new construction starts due to both the status of the capital markets and insurance markets along with a general consensus of investors wanting to see absorption of new supply presently being delivered in the coming year.”

• TECHNOLOGY

Natalia Martinez-Kalinina
Organizational psychologist and co-founder, Base, Miami

FORECAST: “A return to more analog, less digital modalities, along with a heavy focus on experiences and products that focus on the human touch. More embedded and creative AI utilization, across industry and consumer-facing applications. A continued focus on sustainability-focused accountability, and in tethering green solutions to the bottom line. An increased demand for personalization — whether in marketing/advertising, the leveraging of personal data as an asset, or tailored solutions and products.”

CAPITAL: “In the current fundraising environment, it would be a mistake to assume that investors are not investing — they are, especially in established funds. In fact, many of them are moving full steam ahead, believing the current climate is bringing a different set of opportunities. However, what’s evident is that fundraising conversations have become much more focused on profitability over growth. Gone are the days of outlandish valuations, as well as the days of outlandish operating expense spending. This is even more true in the shadow of the crypto and metaverse funding bubble. So these days, fundraising is more likely to happen hand in hand with smart fiscal decision-making and a path to profitability.”

CHALLENGES: “South Florida’s affordability metrics rank amongst the worst in the nation, with above-average housing costs and below-average incomes. In fact, more than a third of renters in the region are severely burdened, spending more than half of their incomes on housing. For us to continue growing and deepening in sectors around the knowledge economy, we need to reconcile the edges of livability that can attract younger talent and retain a workforce across industry verticals.”

• INSURANCE

Oscar Seikaly
CEO, NSI Insurance Group, Miami

“We are hoping to see more stability in the insurance markets in 2024. While we are not expecting to see reductions, we expect pricing to stabilize. The (2023 legislative) reforms are a step in the right direction and will improve the current landscape, considering about 75% of all claim-related insurance lawsuits stem from Florida. However, insurance rate increases do not just arise from litigation. Insurance pricing is complex and there are several factors driving the uptick in premiums, including rising reinsurance rates, the cost of construction supplies and the increased frequency and severity of extreme weather events. Once insurers start to experience profitability, reduced premiums will follow.

The increasing cost and frequency of climate disasters have put insurers in the hot seat. The industry must adapt to the new risk realities of climate change by investing in technology and utilizing meteorological data to predict and price potential weather-related catastrophes. Additionally, the superior construction codes in Miami-Dade should be a requirement throughout the state; older buildings should be required to be hardened so that they fare better when a storm hits.”

• BANKING

Calixto “Cali” Garcia-Velez
President & CEO, Banesco USA, Miami

“The region continues to benefit from an enormous flow of capital from both domestic and international investors and businesses, which coupled with steady employment and population growth will help buffer South Florida …The biggest challenge is that many banks are pulling back lending due to the economic uncertainty and the current commercial real estate landscape. Essentially, they are throwing the baby out with the bathwater. However, South Florida is an anomaly. If you peel back a layer of the onion, our region is not experiencing the same negative trends as other parts of the country. At Banesco, we remain bullish on the future of our community, given the area’s continued surge in residential and business migration. Given the strong economic fundamentals benefiting Florida, there continues to be an opportunity to lend to the growing and diverse small- and mid-size business community along with niche sectors within the business community.

Commercial real estate transactions are going to slow down due to the rising interest rates and insurance premiums. As a leading community bank, we see tremendous opportunity to grow in the commercial and industrial (C&I) lending segment and are pivoting our focus to C&I as this sector is not as rate sensitive. Therefore, we are enhancing our capabilities and investing more in this sector to better serve our growing client base. At Banesco, we’re recruiting experienced bankers, expanding into new markets and seizing opportunities across our business lines, including commercial, corporate and real estate and consumer banking for both our domestic and international clients.”

The Underline

More than 2 million people are expected to take advantage of Miami’s Underline once a 2.14-mile, second phase opens this March. Running beneath Metrorail lines, it will offer dog-friendly, safe pedestrian and bicycle lanes, and playground space along with 100,000 native plants and trees to attract butterflies, bees and birds. Once complete, the Underline will be a 10-mile linear park running from the Miami River past the Vizcaya Metrorail station to the Dadeland South Metrorail station.

MIAMI-DADE COUNTY

• Miami-Dade County leads a newly-designated Climate Resilience Tech Hub with $50-$75 million in federal money for developing and scaling innovations related to “Sustainable and Resilient Infrastructure solutions for the global climate crisis,” a White House announcement said. It is one of 31 tech hubs nationally, with money coming from the 2022 CHIPS and Science Act. Miami-Dade Mayor Daniella Levine Cava called the designation “a generational opportunity that promises to tackle the climate crisis and directly fuel economic development here in South Florida.”
• Canadian-based Jesta Group has scaled down plans to turn Miami Beach’s iconic Clevelander Hotel and adjacent Essex House into workforce housing apartments. Original plans called for a 30-story building, but that has been reduced to 18. While city officials still object, noting it would clash with the neighborhood’s iconic image, Jesta promises to preserve the Clevelander and Essex structures. To comply with Florida’s new Live Local Act, 40%, or at least 55 units among the planned 137, will be offered for rent at affordable housing levels set by the area’s median income.
• Florida International University will provide 163 female employees $575,000 in back wages and interest under a settlement with the U.S Department of Labor. The school reportedly paid the women less than their male counterparts in 2017-18. In addition to the back pay, FIU is setting aside $125,000 to cover additional pay equity adjustments.
• Attorney Richard I. Segal was named chairman of the Miami Beach Chamber of Commerce. Segal, a third-generation native of the city, has served with the chamber for nearly a decade. Segal also was named co-managing partner in the Miami office for RFB+Fisher Potter Hodas, a national firm specializing in high-dollar marital disputes and business litigation.
• Eight new cruise ships will dock at PortMiami this year, including Royal Caribbean’s Icon of the Sea, the world’s largest. Other additions include Regent’s Seven Seas Grandeur, the Oceania Vista, Carnival Cruise Line Costa Venezia and Scenic Eclipse II. PortMiami had its busiest passenger day in 2023, drawing 67,594 people on April 9.

MONROE COUNTY

• Scientists continue to return thousands of corals to sea nurseries and will monitor them to see if they can return to health and normal growth. Last summer’s record-high water temperatures triggered a bleaching reaction that threatened their existence. Much of the work is being done at the Keys Marine Laboratory, part of the Florida Institute of Oceanography. Scientists are reattaching corals with epoxy, cement, nails and zip ties.
• Everglades National Park once again has a Flamingo Lodge & Restaurant overlooking Florida Bay in Monroe County 18 years after the original establishment closed. It has 24 one- and two-bedroom suites made from modified, climate-resistant shipping containers. Guests can use boat slips and rent boats, kayaks, canoes and bikes at the Flamingo Marina and store. The original lodge opened in 1966 but was shut down in 2005 due to damage from hurricanes Katrina and Wilma.

New Courthouse

Miami-Dade’s civil and probate courts, the clerk of the courts and the 11th Judicial Circuit will have spacious offices this fall when a $263-million, 25-story courthouse opens. Fourteen years in the making, the courthouse offers 46 courtrooms and 620,000 square feet of space designed by HOK.

Tags: Economic Outlook, Feature