The Biggest Challenges Facing Multifamily

MIAMI—Miami Beach, FL next week for RealShare Apartments East to share the major indicators behind deal trends in their markets. GlobeSt.com caught up with Elliott Throne, managing director of HFF, to get his take on these topics in part one of this exclusive interview.

Be sure to come out to RealShare to hear more from Throne. He'll be a panelist on Diagnostics for the Deal: Brokerage Insights.

GlobeSt.com: What are the major drivers behind the deals in our market?

Throne: We are all witnessing Miami become a true global city and the surrounding South Florida market is benefitting from this attention. Investors continually see long-term value down here and we are seeing more and more people coming into the market to invest—and I am not just talking about Northeasterners trying to escape their nasty winter for our amazing February weather.

GlobeSt.com: Are buyers and sellers, lenders and borrowers, on the same page?

Throne: Everyone is on the same page when it comes to wanting to place money in South Florida. While fundamentals continue to stay strong and most people are optimistic that this will continue for the foreseeable future, some are getting concerned that competition and the lack of product is creating an environment where it takes very aggressive underwriting to win a deal. If you are going to be aggressive, this is the type of market that people are willing to do so. 

GlobeSt.com: What challenges do you see for multifamily in the local market?

Throne: We are seeing additional projects being delivered but it's still at a pace that can easily be absorbed. Older assets are being renovated up to a higher quality and owners are successfully being able to raise their rents to bridge the wide gap between what new developments are charging. The main concern, not just locally but nationally, is how high we can keep pushing rents before serious resistance kick in. There is no question that there is additional room … it's just how much?