These are boom times for South Florida multifamily, but what next? Franklin Street regional managing partner Deme Mekras tells us the ride isn’t over yet. But it might be a little slower and just a bit bumpier in ’14. (So less of a boom and more of middling rumble.)
Multifamily property values will continue to increase over the next 12 months, Deme says, but not at the same pace as the last 12. That growth isn’t sustainable. On the income side, he expects more rent growth in core markets, but stabilization in secondary markets. Concerns about the inevitable interest rate hike (which is the finance world’s version of the boogey man) will inspire a little more caution among investors looking for multifamily deals, though no one knows exactly when rates will rise (just like no one’s ever quite sure when Freddie Krueger’s going to appear next).
Next year will aslo bring concern about multifamily oversupply, especially in Class-A space, both rental and for-sale. But that doesn’t mean there still isn’t opportunity for well-placed new development. Recently, Deme repped GC3 Development in its purchase of an existing older apartment building at 635 Almeria Ave in Coral Gables, which GC3 plans to replace with upper-end townhomes. Deme says there’s a lot of demand to live in Coral Gables, but not very many sites on which to build new product. (If you wanna live there now, a ‘gator might let you share some swamp.)