South Florida MF Sales Decrease for 3rd Year

MIAMI—The latest Weaver Report on multifamily sales in South Florida paints a robust picture of a region poised for long-term growth. The report is put together by Calum Weaver, executive managing director of Cushman & Wakefield’s Multifamily Group in Florida.

Weaver says in 2019 there were 250 multifamily sales totaling $3.4 billion – the fifth highest ever recorded in South Florida. Still, sales decreased for the third year in a row from the record of 2016. There are fewer deals available in the market which has slowed sale volume. The biggest challenge is finding viable acquisition opportunities with more buyers than sellers in the market.

In 2019, Broward County witnessed $1.65 billion in sales – almost 50% of the total for multifamily sales in South Florida. The average price per unit sale in Broward was a record $214,000. Palm Beach and Miami-Dade each had total sales around $850 million. Weaver’s team anticipates sales volume to remain at similar levels in 2020.

Here are some more highlights of the report:

Ten years ago, the average sale values for apartments in Miami-Dade, Broward and Palm Beach counties were $84,400, $61,500, and $50,200 per unit, respectively. By the end of 2019, those values rose to $180,000, $214,400 and $167,700 per unit.

In the last five years, there were 42,582 units built in South Florida. During this time, the market has experienced record rents and near record low vacancies.

Rents were at record levels for the tenth year in a row in all three counties. In the past decade, asking rents increased by 49%, 43%, and 53% in Miami-Dade, Broward, and Palm Beach counties respectively.

There is a record amount of multifamily construction being built, almost 10% of the existing rental inventory.

While the amount of under construction units is causing concern to some investors, the group believes the number of units being built is not enough. More construction is needed to meet the demands of a growing population with a diminished homeownership rate.

At the beginning of the last decade the most active private capital multifamily investors in South Florida derived from Latin America. Now it’s New Yorkers. New York investors were always prominent in South Florida, but we are seeing an unprecedented amount of private capital looking to invest in multifamily

Looking ahead, Weaver says the good news is the market is ideally positioned for continued long-term growth. Florida has a history of boom-bust real estate markets but excellent market fundamentals coupled with realistic underwriting and financing analysis will keep the market in equilibrium. The South Florida multifamily fundamentals are, and will continue to be, the single biggest driver of performance in the market.

Population/household growth, low homeownership rates, higher home prices, demographic preferences to rent versus buy, low unemployment rate, higher wage growth, limited land and a wonderful lifestyle all contribute towards an extremely healthy market and Weaver’s team sees no signs of that changing.