If you live in Florida, you live in one of the top 10 states to start a business.
In WalleHub‘s Best Big Cities For Starting A Business, Miami ranked number three and, with almost 240 startups per 100,000 residents, it is the city with the most number of startups.
Although not for the faint of heart, entrepreneurship offers many rewards and I think South Florida is the place to start a company or investing in real estate, which is entrepreneurial, than in South Florida.
In last week’s post, I said I was going to share with you my “Aha” moment when I realized I was self sabotaging a real estate deal. However, as I sat down to write this, I realized I had to go back to 2011 and the first deal I actually did sabotage.
832 Granada Groves Ct., in Coral Gables was a cute little Old Spanish with three bedrooms, 1 bath, an updated kitchen, beautiful wood floors and an absolutely adorable back yard. As I walked through the house, it just felt so right. Have you ever had that feeling when you just know something is right for you? Well this was it.
We had survived the Great Recession, had done our numbers, had discussed purchasing investment real estate etc. I had been a Realtor for years, I knew the market, blah, blah, blah. It was a fairly competitive market, but I was the first one to see it, made an offer, got the contract executed, made it through inspections, and then, during the inspection period, I balked. I let a little fear and doubt creep in and the negative “what if’s” started: “What if the termite damage they found was bigger than we think”, “What if the house doesn’t rent for several months”, “What if we end up bankrupt and homeless”? Seriously?! Yes! All of these crazy-not-realistic-at-all questions popped into my head and my answers weren’t even rational! Long story short, I convinced my husband and myself that we were making a big mistake, that we couldn’t afford the risk (we totally could’ve), and we backed out of the deal. It closed for $242,000 in September of 2011. It sold in March 2018 for $430,000. Ouch!
In a sign of Florida’s continued attraction as a place to visit, live, work and invest, the National and Miami Association of Realtors 2017 Profile of International Activity states that foreign buyers purchased $153 billion of residential properties last year, approximately $50 billion more than in 2016. Though purchases were made throughout the U.S., Florida, Texas, California, New Jersey and Arizona accounted for 54% of the sales.
Out of Florida’s $24.2 billion of residential purchases by international buyers, South Florida accounted for $7.1 billion. Although the majority of these buyers were from South America, France and Italy were also in the top buying countries followed by Canada, Israel, Mexico, Russia and Switzerland. Increasing the diversity of South Florida’s population is great news and great for business! The top purchasing country in Miami-Dade was Venezuela 12%, in Broward it was Canada also with 12%, and in Palm Beach County Canada accounted for 31% of all international purchases.
It seems like you couldn’t open a newspaper or business journal in 2017 without the headlines screaming, “Retail Is Dead“. There are lists of store closures for 2018 and many large retailers are on those lists. Toys R Us, Macy’s and The Gap are just a few that are closing stores and more companies will probably be added as the economy continues to improve but companies fail to adapt to the changing retail landscape.
E-commerce, demographics and consumer tastes are all contributing to the shift in, not death of, retail. As Arden Karson, Senior Managing Director of South Florida for CBRE, emphasized in her presentation at the 2018 CCIM Commercial Real Estate Outlook Conference, it isn’t that the consumer isn’t spending, or if they are they are only spending online, but rather that consumer spending is shifting. In what she calls an economic bifurcation, where consumers are shopping at luxury retailers, such as Louis Vitton, and discount retailers, such as Home Goods, consumers are shunning the department stores. Guess who makes up a large part of the closing lists? Yep, department stores.
As to whether or not Amazon will be the final nail in the coffin to brick and mortar retail, according to eMarketer Amazon accounts for 4% of online sales. Although online sales as a percent of consumer spending are increasing, they account for approximately 10% of retail sales and a lot of those sales are multi-channel, such as ordering online and picking up at the store or ordering online and then returning in the store. My experience with a lululemon gift from my husband is a great example of how shoppers are changing how they shop.
I love lululemon workout clothes so my thoughtful husband ordered me new running pants and a top as a gift. They were perfect, except the top was too large. Instead of packing up the top, printing out the return label, taking it to the UPS store to return, tracking the return and the credit, and then ordering another top that hopefully fit, I will be returning it to my nearest lululemon store, where I will try on tops to make sure they fit. So is retail dead? I don’t think so. The retailers that are doing well are adapting to what the consumer wants by making the entire purchasing process a pleasant experience. Today’s consumer is more interested in the shopping experience than in shopping itself and they share that experience, whether or good or bad, online.