MIAMI—Multifamily just keeps growing in Florida, despite signs that some predict could lead to a slow down. In first part of this series, Calum Weaver of CBRE’s Multi-Housing Private Capital Group, gave us three reasons why.
With his views on multifamily growth established, we asked him about other multifamily issues, like product availability. According to CBRE, South Florida multifamily properties in the $1 million to $10 million price range saw over $517 million in sales over the past 12 months. That’s a jump of 219% over sales volume in 2009-2010.
So, what’s the availability of multifamily product? Are there enough multifamily, projects out there to meet investor demand?
“That’s probably the biggest frustration we hear from investors,” Weaver tells GlobeSt.com. “The fundamentals are strong, we just can’t find available product.”
Weaver reports that about 20,000 class A multifamily units were taken off the market and converted to condos between 2000 and 2005. Practically speaking, he explains, that has put investors on the hunt for value-add multifamily opportunities in the class B and C categories. That’s where he sees the greatest amount of rental growth, between 3% and 5% per year.
“Fortunately, there are a lot of new developments coming out of the ground,” Weaver says. “In South Florida there’s about 12,000 units about to come online. Still, new supply will barely keep up with demand because no significant class A product has been developed in the past decade, failing homeownership has increased demand for rentals and South Florida’s population continues to grow.”
Be sure to check back tomorrow for part three of this multifamily series. We’ll talk to Weaver about whether now is the time to buy, sell or hold, as well as how the profile of the typical private investor has changed.