Florida's 2025 Commercial Real Estate Trends:

May 2025

Written by Anthony Paulmeno VP of Investor Relations & Funding Castle Group Investments

Florida Commercial Property Investments in 2025: Market Trends and City Spotlights

Florida continues to be a magnet for commercial real estate investors in 2025, fueled by population growth, business migration, and ongoing infrastructure expansion. The state offers a unique blend of opportunities across industrial, multifamily, and hospitality sectors, while other segments like office and traditional retail are undergoing market corrections. With no state income tax and a warm climate attractive to both individuals and corporations, Florida's commercial real estate market remains one of the most closely watched in the nation.

However, not all sectors are performing equally, and success in this market requires strategic positioning. Some Florida cities are experiencing a development boom, while others are showing signs of over-saturation and decline. In this blog, we break down which sectors are thriving, which are cooling off, and where geographically investors may want to shift their focus.

Booming Sectors in Florida Commercial Real Estate

The industrial sector in Florida is seeing explosive growth. Driven by the rise in e-commerce and Florida's strategic access to Latin American trade routes, demand for distribution centers, last-mile delivery facilities, and logistics hubs is soaring. South Florida—especially Miami and Fort Lauderdale—has experienced some of the lowest vacancy rates in the state, with cap rates tightening and lease rates increasing. Inland ports and warehouses along major interstate corridors (I-4 and I-75) are attracting both national and international investors.

The multifamily market remains red-hot in 2025, particularly in cities with rising populations and limited housing inventory. Miami, Orlando, and Tampa have seen a surge in multifamily construction to meet demand from new residents, many of whom are relocating from high-cost states like New York and California. Investors are favoring stabilized Class B properties and value-add opportunities in suburban areas due to affordability and strong rental yields. Rent growth has moderated from the post-COVID spike but remains positive.

Thanks to a robust tourism recovery, the hospitality sector is experiencing significant momentum. Florida welcomed over 140 million tourists in 2024, and early 2025 numbers indicate even stronger growth. This trend is driving investor interest in boutique hotels, resorts, and vacation rental portfolios—particularly in Orlando, Miami Beach, and the Florida Keys. ADR (Average Daily Rate) and occupancy levels are exceeding pre-pandemic benchmarks in key markets.

Declining Sectors in 2025

The office space segment is still adjusting to the new realities of hybrid and remote work. Vacancy rates in suburban and downtown office buildings have risen, prompting landlords to offer increased concessions and invest in repositioning properties into flexible or co-working spaces. Markets like Jacksonville and West Palm Beach have been especially hard hit. Tenants are seeking smaller footprints and more flexible lease terms, leading to a shift in demand toward Class A amenities and mixed-use environments.

Traditional brick-and-mortar retail is facing continued headwinds. Malls and power centers anchored by department stores are particularly vulnerable, while necessity-based retail—such as grocery-anchored shopping centers and medical retail—is holding steady. Locations like Sanford and Fort Myers have seen prominent retail closures, including once-thriving centers like the Seminole Towne Center. E-commerce, inflation, and shifting consumer habits are forcing investors to be extremely selective.

Florida Cities Seeing the Most Growth

Miami remains a top destination for capital investment due to its international connectivity, business-friendly policies, and emergence as a tech and finance hub. The influx of hedge funds, private equity firms, and tech companies relocating from the Northeast has led to a surge in demand for Class A office, luxury residential, and mixed-use developments. Industrial and multifamily projects continue to receive strong interest from institutional investors.

Tampa is emerging as a serious contender for long-term commercial growth. Its expanding population, talent pipeline from universities, and major infrastructure improvements are attracting developers and tenants alike. Industrial parks and logistics hubs along I-4 are in high demand, and downtown Tampa has seen a resurgence in multifamily and lifestyle-oriented development.

With its diversified economy centered on tourism, healthcare, and education, Orlando is attracting strong investor interest. Hospitality assets are performing exceptionally well, and there is also steady demand for multifamily housing due to population growth. New entertainment and hospitality projects are pushing commercial activity beyond the traditional downtown and theme park corridors.

Florida Cities Showing Signs of Decline

While still affluent, Naples is showing signs of oversaturation. Rising inventory and softening demand in luxury residential and commercial assets are slowing down the local market. Cap rates are expanding, and sellers are more flexible than in previous years. Investors are approaching Naples with caution, looking more toward stabilized assets and long-term appreciation potential rather than short-term gains.

 Fort Myers has experienced one of the steepest declines in single-family home pricing—down nearly 4% year-over-year—as well as reduced retail activity. Recovery from recent hurricanes has been slower than anticipated, and some developers have paused new projects. Commercial activity is sluggish, and liquidity in the market has decreased, leading to fewer large-scale transactions.

Final Thoughts:

Florida's commercial real estate landscape in 2025 is a study in contrasts. Strategic investors are capitalizing on industrial, multifamily, and hospitality growth in metros like Miami, Tampa, and Orlando. At the same time, cautious investors are avoiding overbuilt or stagnant areas such as Naples and Fort Myers. Understanding the nuances of each sector and local market will be essential for investors aiming to navigate the opportunities—and risks—of Florida's ever-evolving real estate market.