MIAMI—South Florida multifamily rental rates just keep rising. The question is, how high can they go?
GlobeSt.com caught up with Deme Mekras, regional managing partner at Franklin Street Real Estate Services, to get his thoughts on this and other issues in part two of this exclusive interview. Mekras will be on hand at RealShare Apartments East to share the major indicators behind deal trends in their markets. You can still read part one of this exclusive interview: South Florida Multifamily Sellers Hard to Find.
GlobeSt.com: How do you get creative to make the deal work for all parties?
Mekras: I operate on a consultative basis. I understand very well that owners of multimillion-dollar assets do not make buy-sell decisions flippantly.
Therefore, I painstakingly try to work through all of the risks and benefits of their possible actions and inactions with their properties. Additionally, I work hard to be involved with all aspects of the transaction and keep in constant touch with all parties involved, buyer, seller, their respective attorneys, the bank and the third party report providers. They all need to line up to get to the closing table successfully.
GlobeSt.com: What do you see for the multifamily market in South Florida for 2015? Any big changes?
Mekras: At some point the rental rate appreciation will run up against the limits of tenant wages. When we hit that point, there will be a stall in rent growth—unless, of course, the local economy continues growing and the natural forces of the market begin to push up wages and then the rental growth may persist.
There is talk about, “What happens if the foreign investment dries up?” This concern is too general in nature to be overly concerning. Why? Because so long as the USA offers the most stable economy on planet earth, there will be wealthy foreigners who plunk down millions and even billions in US real estate.
All that changes is from year to year is which country is it coming from. And are they investing money they think they might lose in their homeland or are they exporting profits that are subject to nationalization or hyperinflation at any moment if they leave in their own countries.