Q1 2025 Fort Lauderdale Multifamily Market Report

Key Findings

• Fort Lauderdale Market Sees Diverging Trends Between Demand Recovery and Supply Pressure: Although quarterly apartment absorption has rebounded to over 900 units, exceeding the 10-year average, vacancies have risen to 7.2% due to an ongoing wave of over 9,600 new luxury units.
• Sales Volume Slows But Pricing Remains Resilient: While annual transaction volume has dipped to $2.1 billion and cap rates have risen to 5.9%, top-tier properties like Bell Pembroke Pines and The Ellsworth still traded for over $290K and $420K per unit, respectively.
• Affordable Assets and Workforce Housing Outperform: With Class C units posting higher annual rent gains (1.3%) than luxury units (0.2%), deals like 6101 Pierce St and 5195 NE 18th Ave show stronger pricing relative to stable occupancy and affordability appeal.
• Hollywood/Dania Beach and Pompano Lead Both Demand and Delivery: As over 30% of new supply targets submarkets like Hollywood and Pompano, recent trades such as 1241 NE 16th Ter and 1241-1251 W River Dr reflect investor focus on yield in affordable growth corridors.

Fort Lauderdale’s economy remains resilient, supported by strong employment in finance, professional services, and information sectors, which has helped push median incomes 7% above Miami’s. Although job growth is slowing, the region’s unemployment rate remains below 4%, and nonfarm employment is still 4% above pre-pandemic levels. Real retail sales are 13% higher than pre-2020, reflecting the area’s solid consumer spending power despite rising living costs.

Market Performance

The market is facing a notable expansion in vacancy, driven primarily by the surge in new construction deliveries. In Q1 2025 the vacancy rate increased to 7.5%, up from a post-pandemic low of 3.5%, with the luxury segment experiencing the sharpest rise to 9.2%. In contrast, vacancy rates for Class B and C units have remained below 7%, supported by continued demand for more affordable rental options. Much of the recent vacancy expansion has been concentrated in submarkets like Hollywood/Dania Beach and Pompano Beach, where a large share of the metro’s supply pipeline is currently under construction or recently delivered. Rent growth has slowed markedly in response to the rising vacancy and intensified competition among new, high-end properties.

Asking rent growth stands at just 0.5% year-over-year, well below the five-year average of 5.2% and even the national average of 1.2%. The slowdown has been most pronounced in the luxury segment, where annual rent growth is a muted 0.2%, as developers offer significant concessions—such as two months of free rent—to attract tenants. Meanwhile, Class C units posted rent gains of 1.3%, outperforming other segments due to stronger demand from cost-burdened renters and limited affordable housing supply, a trend expected to continue in the near term.

Construction

Multifamily construction in Fort Lauderdale has surged over the past two years, with activity continuing to accelerate through 2024. More than 9,600 units are currently underway, representing 6.7% of the metro’s existing apartment inventory—making it the fourth-largest pipeline in Florida after Miami, Orlando, and Tampa. This building boom follows record-setting construction starts in 2021 and 2022, when over 5,300 and 6,900 units broke ground, respectively. The vast majority of new developments are luxury Class A units, with over 80% of the current pipeline falling into this category, and a large share located between I-95 and the Atlantic Ocean in submarkets like Central Fort Lauderdale, Hollywood/Dania Beach, and Pompano Beach/Deerfield Beach. This elevated level of construction is reshaping the competitive landscape, particularly in premium locations with abundant amenities such as proximity to Las Olas Boulevard and beach access.

Nearly 60% of under-construction units are concentrated in just three submarkets—Central Fort Lauderdale, Hollywood/Dania Beach, and Pompano Beach/Deerfield Beach—highlighting the spatial concentration of supply pressures. Developers remain active despite slowing population and job growth, banking on the region’s long-term appeal, tight single-family housing inventory, and high homeownership barriers driven by steep mortgage rates and rising insurance costs. However, the influx of new high-end apartments is expected to place continued downward pressure on rent growth and extend elevated vacancies in the luxury segment through at least the end of 2025.

Sales

Multifamily sales activity in Fort Lauderdale has moderated from peak levels, with total transaction volume over the past 12 months reaching $2.1 billion—below the five-year average of $2.5 billion but still in line with pre-pandemic norms. Investor sentiment has shifted amid rising interest rates and softening fundamentals, leading to higher cap rates, which have climbed from a three-year low of 4.5% to an average of 5.9% as of Q2 2025.

Despite this, pricing remains strong for well-located, newer assets, with several major trades closing above $250,000 per unit, including The Rise Central and Bell Pembroke Pines. The most expensive recent deal, The Ellsworth in Plantation, sold for $422,000 per unit, reflecting premium pricing for stabilized, high-end product with minimal lease-up risk. Meanwhile, older or higher-vacancy properties are trading at deeper discounts, as seen in several mid-market transactions that posted cap rates above 7%, indicating a bifurcation in buyer appetite based on asset quality and income stability.