Miami's Best Multifamily Days Yet to Come?
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MIAMI—For all the talk about Miami’s booming multifamily market, a new report suggest the best may be yet to come. According to Marcus & Millichap’s second quarter Miami apartment market report, low vacancy and a brighter outlook are pulling investors into the county.
“After grinding away at a sluggish pace since the end of the recession, the Miami-Dade economy continues to accelerate behind more vigorous hiring, favorable demographics and a recovering housing market,” the report reads. “These trends have made the Miami-Dade apartment sector one of the strongest in the country, with vacancy dropping to roughly 200 basis points below the nationwide level at the end of the first quarter.”
According to M&M, job creation in service-sector areas—including retail and healthcare—is attracting new residents and generating demand for rental housing across Miami-Dade County. The firm estimates employers in Miami-Dade will create 35,000 jobs in 2014 to expand payrolls 3.3%. More than 34,000 workers were hired in Miami-Dade County in 2013.
The positive employment numbers re giving multifamily landlords the ability to raise rents as leases expire. The average rent in Miami-Dade will rise 4.2% in 2014 to $1,259 per month. A 6.2% increase was recorded last year, the firm reports. Vacancy will tick up 20 basis points in 2014 to 3.5% as some large multifamily projects slated to come online late in the year may not be sufficiently leased when the year-end tally is made. During 2013, M&M reports vacancy also rose 20 basis points.
What’s more, the flood of residents moving into existing multifamily projects is encouraging developers to break ground on new apartment buildings. In 2014, 2,900 multifamily units will come online in Miami-Dade. That exceeds the nearly 2,500 rentals delivered in 2013. M&M reports work will proceed on an additional 3,800 multifamily units currently scheduled for completion next year.
“Recently completed projects are performing well, with many developers reporting lease-ups and rents that exceed initial expectations,” the report reads. “Properties in the construction pipeline will replace only a portion of the rentals converted to condos during the last boom.”
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