Investors are flocking to South Florida real estate’s multi-family sector, where prices and demand are high.
This is due in part to the few vacancies – about 3.5 percent of the nearly 295,000 multi-family units in Miami-Dade are available, Miami Today reported, citing data from the Miami Association of Realtors. The vacancy rate was 4.9 percent last year, a drop from 6 percent in 2010. Investors, therefore, are willing to pay large sums for buildings with four or more vacant units.
“They’re looking to build in areas where rents can be the highest attainable, because the cost of construction is so high,” Robert Given, vice chairman of CBRE, told Miami Today.
Dallas-based Millcreek Residential, among the investors developing its own properties, is behind two major Coral Gables mid-rises. Modera Merrick Park is a 262-unit development expecting move-ins by November 2014, while Modera Coral Gables is a 237-unit luxury building with a 6,000-square-foot retail space, six residential floors, three parking levels and a pool, the report said.
Developers are looking to build for a 6 to 7 percent return on cost, while being supported by a big life insurance company or other partners. Roughly 9,200 units in the pipeline are expected to hit the market over the next three years, which would be a 20 percent rise in inventory, according to CBRE data. [Miami Today] – Mark Maurer