While most of the real estate industry spent the last few years celebrating Florida’s pandemic-era population boom, at least one development firm was quietly reading the numbers and heading for the exit.
Daniel Kaufman, founder of Kaufman & Company – a fully vertically integrated real estate firm operating across multifamily development, advisory, and joint ventures – made the call to exit Florida based on data signals that were visible well before they became consensus. The firm builds workforce and middle-class housing. And by that specific measure, Florida’s story had already changed.
What the Data Was Saying
The pandemic migration surge into Florida was real. But the segment driving it was not the same segment Kaufman & Company builds for. High-net-worth individuals and retirees moved in. The middle class – the teachers, healthcare workers, and service employees who make cities function – were moving out.
Current census data confirms net outmigration from Florida. Job creation is concentrated in low-wage service work. Construction costs in the state have climbed above California in some segments. Insurance premiums are among the highest in the country. Wages, ranked near the bottom nationally, have not kept pace.
For a firm building workforce housing, those fundamentals don’t work. The cost structure to build is too high. The tenant base that can sustain market rents in that cost environment is shrinking.
Why Developers Stay When They Should Leave
The harder question isn’t why the data pointed toward an exit. It’s why so many developers ignored it.
Kaufman is direct on this: most decisions in real estate are emotional. Florida has a strong brand. People have personal connections to the market. The press was uniformly positive for years. And when you’ve already deployed capital in a region, there’s a natural reluctance to acknowledge that the thesis has changed.
The firms that will be most exposed in Florida over the next two to three years are the ones who looked at the market’s peak-era metrics and treated them as a steady state. They’re building into a concession-heavy, oversupplied environment, with rising costs and a tenant base that can’t support the rents needed to make the numbers work.
Where the Capital Is Going Instead
Kaufman & Company isn’t bearish on real estate broadly. They’ve identified clear alternatives to markets that have become overcrowded.
Northwest Indiana, sitting roughly 30 minutes outside Chicago, is one current focus. Small cities like Chesterton and Valparaiso have near-zero vacancy and no concessions on new units. The population isn’t growing dramatically, but there’s not enough existing inventory to serve the people already there. For a firm that builds at a measured, sub-institutional scale, that’s exactly the kind of structural gap they look for.
Burlington, Vermont is another. Seventy-five thousand residents, some of the highest rental rates relative to size in the country, and a vacancy rate approaching zero. Too small for the major institutional platforms. Exactly the right size for a firm that moves fast and doesn’t need a committee decision to commit to a market.
Kaufman & Company’s broader approach to market selection and development is documented at their case study page.
The Broader Signal
The Florida story is not unique to Florida. It’s a pattern that plays out in every market that experiences a rapid surge of attention and capital: oversupply follows enthusiasm, concessions follow oversupply, and operators who built their future demand projections on peak-era numbers are left with assets that don’t perform.
The firms that come out ahead in those cycles aren’t necessarily smarter. They’re just watching a different set of inputs, and they’re willing to move against the consensus when those inputs start telling a different story.
Kaufman & Company is a vertically integrated real estate development platform specializing in workforce and middle-class multifamily housing across emerging secondary and tertiary markets. The firm operates without outside investor capital, maintaining the speed and flexibility to enter and exit markets ahead of institutional capital flows.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.