People want to live in South Florida. They’ve been coming here for a long time, and most of the people coming here these days have money.
Usually a lot of it.
And they all need places to live, so here’s my take on the Miami multifamily market.
Condos
There’s not much land left on the water, so developers are building inland and selling the skyline view.
Units are selling, and units are closing. We’re absorbing about 3,000 units a year, so I think the market will be just fine.
If you already out of the ground on a condo deal, you’re doing okay. If you’re not out of the ground yet, rising costs are going to present a challenge.
Student Housing
Now, here’s something really interesting: Some institutional investors and equity investors are switching their focus to student housing, especially near the University of Miami and FIU.
They’re looking for locations with easy access to the campus and amenities, with little or no need for driving.
Apartments
I hear lots of worry about a glut forming in the Miami apartment market, but things are not as they seem. Development is slowing, and the pause will be healthy. Many good development sites remain, and the institutional investors and equity investors want to be here.
Developers go where the equity tells them to go, and one of the choice areas for development is the south side of the Health District, basically northwest Little Havana, in the area of the Marlins ballpark.
Everyone thinks you have to hit $3 per square foot in rent to make sense of a deal. If you’re not out of the ground yet, that may be so. In any case, I think we’ll get to $3 a foot in the not-too-distant future.
Overall, I think the Miami apartment market is in good shape. The institutional and equity guys agree with me, so I’m in good company.
Click here to listen to my full discussion on the Miami multifamily market.
