MIAMI—Whether it’s multifamily, office or industrial, real estate classes in Miami have at least one thing in common: they are trading to the most qualified bidder. Indeed, South Florida brokers have waded through the lean days and are once again getting the deals done.
That was the subject of a RealShare Apartments East panel on Tuesday called “The Art of the Deal: How Brokers Get the Job Done.” Marcus & Millichap executive vice president Gene Berman moderated the panel of experts, which included: Ron Cameron, senior vice president of Colliers International; Avery Klann, principal of ARA; Elliot Throne, director at HFF and Robert Kaplan, a principal at Akman-Ziff.
Berman asked the panel about the 20,000 reported multifamily units coming online in the next few years and the potential impact on the market. Klann did some quick math and offered keen insight into the sum.
“Ten years ago we had 480,000 multifamily units in South Florida,” Klann said. “Today we have about 430,000. We saw about 60,000 condo conversions. The development pipeline combines condos and multifamily and with both we will still have substantially less units than we had 10 years ago.”
As Klann sees it, developers that find the right submarkets and build garden-style apartments in in-fill sites will do well in the new cycle. On the buy-side, he says he saw about 25 offers on each multifamily deal in 2012, which shook out to five in striking distance and only three that qualified to close. And all-cash buyers are still the bidders to beat.
Throne confirmed what deal flow consistently demonstrated in 2012: multifamily supply for sale gets gobbled up almost as fast as it hits the market. Although brand new product in secondary markets is beginning to sell, he say she expects buyers to stick mostly with class A product in primary markets in South Florida this year-but class B and C may be good buys if priced below replacement costs.
“Interest rates are important,” Throne said. “We all know they are going to go up we just don’t know how quickly, so it’s all about your risk profile. If you sell today, it’s a great option. If you want to sell in two years, refinance.”