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Downtown Fort Lauderdale Multifamily Evolution

Downtown Fort Lauderdale Multifamily Evolution
Recent and ongoing rental apartment development activity is changing the living experience in downtown Fort Lauderdale and the surrounding neighborhoods.  An estimated 2,723 luxury rental units in 10 projects have been delivered here since 2004.  As of May 2016, we are aware of over 3,000 luxury rental apartments that are either actively being developed or are in the near- to mid-term construction queue.  Additional projects have been announced but have unknown development timetables. Upscale Rental Lifestyle The unit and community amenities offered at these developments approach luxury condo quality, setting a new standard for rental apartment living.  Today, unit features such as granite countertops, stainless steel appliances and wood floors are commonplace in these “Next Generation” apartments. Performance & Other Trends The existing communities in the downtown Fort Lauderdale multifamily market report average rental rates revolving around $2.25 per square foot and recent, year-over-year rent growth in the 6% to 8% range.  Occupancy rates for stabilized properties average approximately 95%. Apartment unit sizes average around 1,000 to 1,100 square feet but are trending smaller due to rising construction costs.   Three-bedroom units are very limited in new urban projects, typically comprising less than 5% of the total unit mix. Interestingly, rental managers cite the increasing popularity of studio apartments in the 500 to 700 square foot range.  These small units carry a lower monthly rent which is appealing to many urban residents who do not require much living space. Ft. Lauderdale’s Urban Apartment Dwellers So who’s living in these high-end apartments?  Similar to tren......
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Multifamily Takes the (Economic) Wheel

When looking at all the new development taking place in our nation’s multifamily industry, it seems that most markets are seeing not only growth in their local communities because of all the new construction, but an emerging trend in which multifamily is actually taking the lead in kick-starting local economies. It’s a trend that is beginning to show us just how important a role multifamily plays in our local communities. A role that goes beyond the demand for new rental units and becomes a key catalyst that’s fueling the other sectors of our economy. We know that those looking to buy a single-family home in the current market are finding that they have limited access to available credit and it’s forcing them to reconsider purchasing for the time being and it’s fueling the rental market, but did you know that multifamily development is responsible for leading the recovery in the residential sector and  boosting the growth we’re experiencing in the construction markets? According to recently released U.S. Census data, permits for new housing construction saw an 8% boost in April 2014 with a majority of those permits being issued for multifamily structures that are planned for five units or more and overall multifamily construction was up 32.5% year-over-year in the first quarter of 2014. With all these new communities coming together, the concentration of new residents means that existing businesses in the these areas are seeing a boost in new customers.  This translates into a need to hire more people to service the influx of new clientele, ......
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Multifamily Investment Trend | On the Edge of Their Seats: Why the Multifamily Inventory Has Investors Anxious

Multifamily Investment Trend | On the Edge of Their Seats: Why the Multifamily Inventory Has Investors Anxious
According to an article recently published in the Herald Tribune, both investors and real estate professionals are anxious about the current state of the multifamily inventory. One apartment developer with over 200 new rentals in the downtown area is happy that their community is in full swing and renting out at a higher rate than they had initially predicted. Unfortunately, a new 171-unit project has recently announced that they will be opening their community in the same area and it’s since caused investors to become a little on edge. They fear that the apartment construction industry might be outpacing the current demand. The owner of Greco, a real estate development firm in Minneapolis, Minnesota added to the conversation telling the Tribune, “There is a lot of product being delivered in the next 12 months, a lot. I’m always worried about being the last one at the trough.” With an industry wide drop in vacancy rates and an overwhelming surge in the demand for apartments, the Minneapolis market alone has over 7,000 units under construction and almost 14,000 new multifamily units proposed. In the Florida market, developers have experienced the opposite problem as they have been trying to fulfill the demand on the multifamily market that has recently seen former homeowners, who lost properties as a result of foreclosure, entering the rental market alongside the regular influx of young adults and recent college graduates. A look at the nationwide industry, developers are in the process of building over 260,000 units which is a boost of 20,000 additional units c......
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Apartment Markets Retreat in Third Quarter NMHC Survey

All four indexes of the National Multi Housing Council’s (NMHC) October Survey of Apartment Market Conditions dipped below 50 for the first time since July 2009. Market Tightness (46), Sales Volume (46), Equity Financing (39) and Debt Financing (41) all indicated declining conditions from the previous quarter. “After four years of almost continuous improvement across all indicators, apartment markets have taken a small step back,” said Mark Obrinsky, NMHC’s Vice President of Research and Chief Economist. “Conditions cannot continue to improve indefinitely and new development is at least somewhat constrained by available capital—though more on the equity than the debt side. Even so, both the Market Tightness and Sales Volume Index are within hailing distance of the breakeven level and the Debt Financing Index rose despite some rise in interest rates. This bodes well for the apartment industry going forward.” Key findings include: Opinions are mixed regarding the availability of capital for new development. A total of 77 percent of respondents regarded construction debt financing as widely available—34 percent think both equity and debt financing are widely available, while 43 percent think construction loans are widely available but equity capital for new development is constrained. Only 36 percent think equity capital is widely available. [Note: this is excluding those respondents that chose “Don’t Know/Not Applicable”]. Market Tightness Index fell to 46 from 55. Two-thirds of respondents (67 percent) saw no change in market tightness (higher rents and/or occupancy rates) compared with three months ago. One-fifth of respondents (up from 14 percent in July) felt that ma......
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