Given this competitive landscape, it's important that investors manage their expectations. Here is how we're seeing investors approach the Florida multifamily market:

Value-add properties continue to be the most popular asset class within multifamily. But, with cap rates compressing to all-time lows, many investors are now looking to buy newer Class A properties for the first time, in part because going-in cap rates are actually higher than most value-add deals.
Other investors are looking for land when they can't find properties of interest – which is inherently riskier, given the years it takes to build a community from the ground up.
Still others are considering multifamily properties in secondary and tertiary markets in Florida, such as Ocala, Lakeland, the Space Coast, Sarasota and Fort Myers/Naples, chasing better yields and pricing.
What the future holds is anyone's guess, but good operators who focus on curb appeal, safety and quality of living for their residents will be insulated from ebbs and flows in the market.

The bottom line for investors—regardless of which approach they take to participate in the Florida multifamily market—is that there's still time to do so. The Florida multifamily market is durable and has plenty of runway left. As new residents continue moving to the state in droves and consumer demand for multifamily rentals drives investor interest in this product type, we're poised to see significant activity and strength in the Florida multifamily market in the months and years ahead.

Instant Insights /

How Long Will the Florida Multifamily Market Stay This Hot?

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