The Weekly Dirt: Party’s ending for multifamily

Multifamily occupancy and investment sales volume are down across South Florida.

Landlords are also offering some concessions — including a month’s free rent at properties like the Dorsey in Wynwood, or a discount on fees.

Occupancy is down 2 percentage points from last year, averaging 95 percent in the second quarter, according to a report from Berkadia. Investment deal volume plummeted, falling 72 percent compared to the same period in 2022. (High interest rates are to blame.)

Investors spent a combined $1.1 billion to acquire apartment properties in the first half of the year, paying an average of $341,000 per unit. Compare that to the $3.9 billion in investment sales during the first half of last year. Investors then spent about $419,000 per unit. 

That’s pushed pricing down by up to 30 percent, Hampton Beebe of Newmark tells my colleague Lidia Dinkova, which resulted in a boost in sales in June. 

The market is expected to soften more by year’s end, but a significant drop in rents is not expected, Dinkova reports. Landlords last quarter kept pushing rents up to an average of $2,500 a month, a 6 percent increase.  

And more supply is coming. Developers are working on completing more than 19,000 units in South Florida by the end of this year, according to the brokerage’s report. 

Brokers are obviously not too concerned. 

“Dropping from 97 percent occupancy to 95 percent is really more of a normalization,” said Roberto Pesant of Berkadia. “Moreover, very few projects are starting construction this year, so any downward pressure will be temporary.”     

What we’re thinking about: Who bought the house next to Adrienne Arsht’s former estate, which billionaire Ken Griffin owns? Are his friends buying up homes on the same street? Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Fox News host Bret Baier paid $37 million for the house at 125 Wells Road in Palm Beach. Roberta Weiner, who is married to Boston-based developer Stephen Weiner, sold the 6,700-square-foot house, which has five bedrooms, six bathrooms and one half-bathroom. 

Commercial: Dream Motor Group paid $150 million for four properties in Miami-Dade County. Coral Gables-based Ussery Automotive Group sold the former police HQ building in Coral Gables for $45 million, an auto body repair shop in Cutler Bay for $5 million and two Mercedes-Benz dealerships in both cities for $100 million.

— Research by Adam Farence 

NEW TO THE MARKET 

Laura Andrassy, the ex-wife of golf great Greg Norman (say that five times fast), listed her five-bedroom, six-and-a-half-bathroom home at 167 Dunbar Road in Palm Beach. The nearly 5,900-square-foot house sits on a 0.4-acre lot and is on the market with Florida Living Realty for $35 million. It includes a walk-in wine cellar, gourmet kitchen, butler’s pantry, two guest suites and a poolside loggia.

A thing we’ve learned 

Real estate broker and former Coral Gables commissioner Jeannett Slesnick died on Aug. 3 after a battle with cancer. Slesnick resigned as commissioner about halfway through her term in late 2016, concerned with overdevelopment in the city. Slesnick and her business partner Ginger Jochem launched their own company in 2011 after Slesnick spent 25 years working with EWM Realty, now a Berkshire Hathaway affiliate. The two also published “Jeannett’s Journal.” The final edition ran last week. 

Elsewhere in Florida 

• Mike DiNapoli, executive director of the Florida Housing Finance Corp., was suspended in July pending the results of an inspector general investigation, according to the Tampa Bay Times. Gov. Ron DeSantis tapped DiNapoli to lead the state’s affordable housing agency in February. DeSantis signed a $711 million affordable housing bill into law in May. 
• Florida Education Commissioner Manny Diaz was MIA at a town hall he was expected to attend last week to discuss the state’s new standards for teaching Black history. The new policy instructs middle school students that enslaved people “developed skills which, in some instances, could be applied for their personal benefit,” AP reports. 
• Publix’s “Where shopping is a pleasure” slogan was very true for the winner of the Mega Millions jackpot, who scored $1.58 billion after buying a ticket at a Publix supermarket in Neptune Beach. Unfortunately, it wasn’t me, as I am still writing this newsletter.