South Florida '05 Multifamily Sales to Top $4B

"This market has been extremely buoyant. The strengthening economy and international interest should continue to stimulate investor demand for apartments and condominiums this year," he adds. According to Massirman, an increasing amount of multifamily investment is coming from Europe and Asia.

He tells GlobeSt.com that his office team alone completed $418 million in multifamily sales transactions during this year's first quarter. In 2004, its total was $2.6 billion, up from $764 million the year before. "More than 60% of our 2004 activity occurred in condo conversion assignments," adds Robert Given, CBRE VP.

"The low interest rates are driving the biggest condominium conversion boom ever witnessed in South Florida," says Given. "Condo developers are swarming across South Florida, paying a premium to acquire and transform rental properties into condos." The low interest rates also provide these condo converters with access to inexpensive capital.

"Lenders continue to be attracted to these product lines because of the absence of construction risk and substantial demand in the residential marketplace throughout South Florida," adds Charles Crapse a senior associate with the CBRE team. This access to diverse forms of inexpensive financing, he says, has led condo converters to acquire rental facilities.

According to data CBRE obtains from Carrollton, TX-based M/PF Research, Massirman says 22,300 former rental units have been converted in the region since the beginning of 2002. "More than 14,600 rental units were taken out for conversion within the first three quarters of last year," he adds, noting that 5,100 of them were in Palm Beach County alone.

New condo construction is also vigorous. There are 4,551 new condo units under construction in Downtown Miami/Brickell, for example, and another 12,174 units are planned for the area.