Florida-based investors are an important source of capital for private real estate fund managers. On average, Florida-based real estate investors have $234mn currently allocated to real estate. Forty-seven percent of Florida’s real estate investors are public pension funds, the largest being Florida State Board of Administration, with assets under management of $162bn. Forty-six percent of real estate investors based in Florida have a target allocation of between 10% and 14.9%, but only 18% of Florida’s real estate investors have a current allocation within this range. This would suggest there is still significant capital due to be committed to the asset class from investors based in the state. Nineteen percent of Florida-based real estate investors have an allocation of 2.5-4.9%, 22% have an allocation of 5-7.4% and 24% have a current allocation of 7.5-9.9%.
The preferred strategies of Florida-based real estate investors are significantly different when compared to investor based in the rest of the US. Data taken from Preqin’s Real Estate Online suggests that investors in Florida are more risk-adverse than the rest of the US, preferring to invest in core funds. Seventy-seven percent of investors in the state have a preference for core vehicles, compared to 59% of all other US-based real estate investors. As such, there is a decreased appetite for value added and opportunistic vehicles, with 47% and 30% of Florida-based real estate investors showing a preference for these vehicles respectively, as opposed to 66% and 57% respectively for the rest of US-based real estate investors. Investors based in the state also have a decreased interest in core-plus, debt and distressed vehicles compared to all other US-based real estate investors. Twenty-four percent, 20% and 20% of Florida-based investors target core-plus, debt, and distressed vehicles respectively compared with 30%, 37% and 31% of the rest of US real estate investors respectively.