South Florida Preparing for Multifamily Flood
MIAMI—While some investors are pulling
out of big deals in the wake of Wall Street’s
woes, certain sectors are seeing growth in
South Florida and across the Southeast.
Multifamily is one of them.
Declining homeownership rates,
limited access to credit for potential
homebuyers and a lack of confidence
in both the economy and the housing market has led to unprecedented
numbers of households opting to
rent versus own their home. So says
Cushman & Wakefield’s midyear US
Multifamily MarketBeat Report.
“There’s no question that South Florida
is on most investors’ preferred market lists,”
says Brad Capas, senior director of
Apartment Brokerage Services at Cushman
& Wakefield. “The market is performing
very well from an occupancy standpoint.
We are starting to see a little rent growth
and significant growth is expected.”
Miami-Dade’s small class A segment and
large class B and C sectors have vacancy
rates in the low 5% range, according to
Charlotte, NC; and Jacksonville and
Orlando, FL—have seen the strongest year-
over-year increases in occupancy, with
vacancies declining three to four percent-
age points. Atlanta ranked fifth for year-to-
date investment volume.
“Throughout the area there
may be three dozen properties
that will start construction in
the next 24 months.”
C&W. Top-quality properties can trade at
cap rates of 6% or less. Most class B assets,
though, generally change hands in the
7%-to-8% range, providing investors with
sizable spreads over financing rates.
Other markets in the Southeast—
including Charleston, SC; Greensboro and
Bright Spots in Florida’s Affordable Housing Landscape
While few corners of the national commercial real estate landscape have enjoyed prosperity in recent years, some sectors have
been more negatively impacted than others. Affordable housing—facing rising demand due to economic volatility, flattened
supply and diminishing funding channels—is among the areas
that continue to weather a perfect storm.
South Florida has been among the areas
hardest hit by the residential real estate
boom-turned-bust. Property values have
By Stephanie Berman-Eisenberg
struggled to find their footing, regional
unemployment rates continue to outpace
the national average and a recent study by
the Center for Housing Policy found that
roughly 42% of South Floridians spend more than half their
total income on housing, compared to only 23% nationally.
Needless to say, one would be hard-pressed to find new residential projects underway here. But a closer look would reveal
a mini-boom taking place in the area’s affordable housing
arena, buoyed by affordability in the residential market and
access to new financing vehicles. In fact, there are about 25
affordable multifamily projects currently under way or recently
completed in Miami-Dade and Broward counties, accounting
for 5,000 new or renovated units.
Statewide, more than $2 billion in federal stimulus funding is
being put to work to develop new residential communities spe-
cially designed for families in need. In some cases, the real
estate impact of these projects stretches far beyond the delivery
of new housing units. Take the US Department of Housing and
Urban Development’s Neighborhood Stabilization Program,
which recently granted $89 million to a consortium of nonprofit
developers in Miami through the American Recovery and
Reinvestment Act of 2009.
Stephanie Berman-Eisenberg is president and CEO of Carrfour Supportive
Housing in Miami. She may be contacted at email@example.com. The views
expressed here are the author’s own.
Vital Signs...Job creation will help push Atlanta’s multifamily vacancy down to 8.6% and rents up to 1.9% by year-end.—Marcus & Millichap