Flex Space Feasibility Study in Florida

Cancellation is the signature

Flex space in Florida stands out for what happens after approval, not for its size or reach. More than a quarter of the approvals made from FY2017 through FY2024 were cancelled, at 27.0% or higher, and the ceiling is a matching 27.0%, so the figure is final. That is the distinctive metric of this cell, and it separates Florida flex from the state's whole book and from flex nationally. The file counts 64 approvals between FY2017 and FY2026 totaling $67.4 million, a rank of 5 of 51 among states, yet the class is only 24 of 39 among Florida asset types, and the 0.56x location quotient shows it is a thin slice of the state's lending. The median loan of $697,100 is 1.16x what the class borrows nationally.

A class that nearly stops

The yearly counts tell a second story. Approvals ran from 5 loans in FY2018 to 13 in FY2021 and 13 in FY2023, then the file shows no approvals in FY2024 and FY2025 and a single loan of $205,000 in FY2026. The FY2024 lessor note explains it. Loans to nonresidential lessors, meaning investor buildings of flex, office or retail type, nearly stop from FY2024. Recent years therefore say little about demand, and a reader should not treat the empty years as a market verdict.

Half of the loans fall between $349,000 and $1.6 million. The 7(a) program carried 58 loans and 504 carried 6, and franchising is 6.3% of the file. Harvest Small Business Finance, LLC is the largest lender, at 8 loans and $8.8 million, and five more sit with Wells Fargo Bank National Association at $4.8 million. Hillsborough County has 11 loans, Broward and Miami-Dade counties 8 each, Duval County 6, and Palm Beach, Pasco and Polk counties 4 each. No charge-off rate is printed for Florida flex; the early disbursed cohort is too small, and the lack of a rate is not a clean record.

Limits of the code and what a study must test

The industry code that holds flex buildings also holds office and retail lessors, and banquet hall rental sits in it as well. A reader cannot tell a warehouse flex building from a strip of shops. A study for a Florida flex project therefore has to supply what the code cannot: tenant mix, lease terms, rent per square foot against comparable buildings, and vacancy history. Purchase or construction cost should be set against the $697,100 median, and the payment coverage test should include a vacancy case, given the cancellation floor of 27.0%. Because lessor deals now meet resistance at SBA, the study should say who will occupy the building. The appraisal will depend on income from leases, so it needs documented tenants and signed terms.