MIAMI—Real Share Apartments East is taking place this week at the Eden Roc Hotel in Miami Beach, but we caught up with Deme Mekras, regional managing partner for Franklin Street, to get some of his thoughts in advance.
Mekras will share more from the stage at Real Share on Tuesday. Be sure to check out Miami’s Tuesday edition for more.
GlobeSt.com: What’s the state of multifamily in Florida as you see it?
Mekras: There is healthy demand for multifamily investment in Florida, particularly from foreign investors who continue to drive the market. The fallout from the financial crisis is essentially over and people see our state as a good place to invest. Spreads on cap rates for different classes of product have also widened, which is another good sign the market is returning to normal.
GlobeSt.com: Beyond Miami, are some markets hotter than others?
Mekras: Outside of South Florida, Tampa, and Orlando are the largest Florida markets and tend to be the most sought after from investors. That being said, Sarasota, Naples, and Ft Myers attract wealthy retirees who tend to invest significant money in real estate.
As the country’s economy has recovered, all of Florida is back in high-growth mode. We are seeing that some South
Florida-based investors are now actually looking for opportunities in other parts of the state where they feel they can get better value than in their own backyard.
GlobeSt.com: How much distress is really left out there and how does the absence of distressed assets impact investor strategies?
Mekras: Most of the distressed product has already been disposed of or worked out by lenders and is no longer a factor driving the market. Most of the opportunistic buyers like hedge funds have already cycled out of the market. They made good buys in the downturn and many have already taken their profits and moved on. With an improved economy, today’s buyers are those whose core business is owning and managing apartment buildings and looking for income and long-term value.