The combination of perfect sunny weather, no income tax, and relatively low COVID-19 case count positioned South Florida for a booming real estate market in 2021. Experts believe the growing number of people moving to Florida, which only accelerated during the pandemic, will further stimulate demand for multifamily. Even in B and C-class apartments, rent payments have been consistent. The only disruption appears to be in submarkets that have been affected by theme park shutdowns. In 2020 alone, Valley Bank’s lending total reached $847.3 million, compared to 2019’s $734.1 million. As a result, commercial real estate lenders and investors appear to be bullish about Florida’s 2021 prospects.
The most notable sales include Wilton Manors’ acquisition, a mixed-use multifamily complex with 66 units for $11 million, or $140,685 per unit. During the time of sale, 96 percent of units were filled. A 358-unit complex in Pembroke Pines was purchased for $79.5 million, or $222,000 per unit, at 95 percent occupied. Even out-of-state buyers are in the mix, with the recent sale of a $13.1 million portfolio in Victoria Park and Las Olas, and another complex in Flagler Village for $67.5 million.
Although 2020 achieved $3.2 billion less in construction starts because of COVID-19-related delays, South Florida still topped $9.6 billion in development. The tri-county area ranked eighth among metros for multifamily construction, with $5.1 billion in starts. While the effects of COVID-19 on development will be present for years to come, South Florida shows incredible signs for a fast recovery.
In recent news, horizontal apartments are making waves in South Florida. These are built-to-rent homes that are single-story and have private entrances or yards. They boast significantly lower construction costs and can achieve 12 to 16 units per acre. Horizontal units are growing in popularity for a number of reasons, the most prominent due to the demand for more space and less dense environments stemming from COVID-19. Additionally, people who move to high-growth cities tend to rent before purchasing a home, and these apartments come with the added benefit of their own backyard, unlike traditional apartment units.
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