WeaveReport South Florida Multifamily

MULTIFAMILY INVESTMENT SALES ANALYSIS | SOUTH FLORIDA GRAPH 1 :: SOUTH FLORIDA HISTORICAL PRICE/UNIT VERSUS PRICE/SF

MU LT I FAM I LY I NVE S TMENT | SOUTH F LOR I DA T E AM

$400

$400,000

MIAMI-DADE BROWARD PALM BEACH

$350

$350,000

$300

$300,000

$250

$250,000

$200

$200,000 Price per Unit

Price Per SF

$150

$150,000

$100

$100,000

$50

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Average per Unit

Average Per SF

* $1MM+ multifamily sales

Source: Cushman & Wakefield

GRAPH 2 :: SOUTH FLORIDA HISTORICAL TRANSACTION VOLUME VERSUS NUMBER OF TRANSACTIONS

$10.0 $12.0 $14.0

100 150 200 250 300 350 400

MIAMI-DADE BROWARD PALM BEACH

$0.0 $2.0 $4.0 $6.0 $8.0

Dollar Volume Billions

Number of Transactions

0 50

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Dollar Volume

Number of Transactions

* $1MM+ multifamily sales

Source: Cushman & Wakefield

MULTIFAMILY SALES • In 2022 there were 631 multifamily sales totaling $9 billion. This is the second highest year on record. • The Cushman & Wakefield Multifamily team in 2022 completed $4.65 billion in sales – 51% of the entire sale activity within South Florida (this includes any multifamily sale with 5+ units and over $1 million). • In 2022, all three South Florida counties (Miami-Dade, Broward, and Palm Beach) experienced record average per unit sales of $350,874 and $312,369 and $385,215 respectively. • 44% of the sale volume was in Miami-Dade, 37% in Broward and 19% in Palm Beach County. • The type of deals varied in each county. Class A sales in Miami-Dade were at 54% of total sales activity, 27% in Broward, and 40% in Palm Beach. RENTS • At 6.8% Miami-Dade had the highest rent growth in 2022 of any major market in the US. At 5.1% Broward made the top ten list of rent growth markets. Palm Beach snuck its way into the top 50 markets at 1.7% rent growth. • Effective rents are at record levels in all three counties. Average effective rents in Miami-Dade are $2,000, $2,204 in Broward, and $2,388 in Palm Beach.

• Aventura, Coral Gables, Fort Lauderdale, Pembroke Pines, Boca Raton, Delray Beach, and Palm Beach Gardens/ Jupiter submarkets each have rents averaging over $2,500 per unit. • There remains a significant delta between recent leases and effective leases at many properties. While rent growth has lowered from 2021 records, significant opportunities remain for investors to take advantage of notable loss to-lease upside with in-place rents notably below market and/or recent leases at the property. • Collections remain strong. We continue to closely monitor collections. If a softening were to happen, it’s predicated that collections, not rent growth will have a greater impact on revenue. VACANCY RATES AND ABSORPTION • Vacancies increased in all three counties in 2022. Miami Dade vacancies increased from 3.2% to 4.7%, Broward from 3.4% to 5.4%, and Palm Beach 4.6% to 6.4%. • Vacancies increased due to new supply. In 2022, there were 4,742 net units absorbed in South Florida. During that same period, there were 11,294 new units delivered to the market. • After a record 2021 of 20,608 units of net absorption, 2022 net absorption decreased to 4,742 units, the lowest level in 10 years. This is a trend to follow in 2023.

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