South Florida’s Class A apartment market stayed strong throughout 2018, despite the luxury condo market slowdown. Out-of-state institutional investors sought out Class A multifamily properties and workforce housing in the tri-county areas as the population is expected to grow significantly over the next few years.
Investors are increasingly betting on areas in the suburbs or just outside of Miami and Fort Lauderdale, including western Broward County. As housing becomes more unaffordable, investors predict that renters are going to seek out cheaper Class A rental housing and move further outside the urban core, experts say.
But some of these multifamily investors are now having to fend off increasing competition from condo investors who are also seeking to rent units. More condo investors are putting their units on the so-called shadow market as they are unable to sell their condos.
Yet so far, multifamily owners have not seemed to be impacted by this new supply. Vacancy rates are low and most new buildings are being absorbed by renters, according to recent reports. In fact, apartment owners may even be in a better position as indicators are showing that home ownership is becoming less of a priority for Americans.
Gables Aventura, $149M
Gables Residential’s sale of Gables Aventura for $149 million to RREEF marked South Florida’s largest apartment deal in 2018.
RREEF, a publicly traded real estate investment trust and an affiliate of Deutsche Bank, paid about $372,500 per unit for the apartment and townhome community at 19920 West Dixie Highway near Aventura, property records show.
Rents at the 400-unit complex rents range from $1,799 to more than $2,808. Atlanta-based Gables Residential completed the 16.3-acre development in 2016. It had previously acquired the site in 2007 from Turnberry Associates for $11 million, according to Real Capital Analytics.
Quaye at Wellington, $120M
HG Management sold the Quaye at Wellington to Stockbridge Capital Group for $120 million.
The Tampa apartment developer sold the 32-acre, 350-unit apartment and townhouse complex at 9840 Quaye Side Drive for about $343,000 per apartment, property records show. It’s about 90 percent leased, according to a press release.
The property features 33 three-story, garden-style buildings, four lakes, a nature preserve, dog park, heated pool, 10,500-square-foot clubhouse with a kitchen, game room, gym and outdoor summer kitchen.
HG secured a $53 million construction loan for the project in 2015 and completed it about a year ago.
Gables Marbella, $112M
A company tied to Chicago-based Heitman paid $112 million for the Gables Marbella apartment community west of Boca Raton, property records show.
The 297-unit rental complex at 22182 Bella Lago Drive traded for about $377,000 per apartment. Records show Marbella Premium Apartments LLC, tied to Atlanta-based developer Gables Residential, sold the property.
Gables Residential paid a little more than $43.4 million for the 19-acre property in 2005. Records show the complex was built a year later.
Heitman is a global real estate investment firm headquartered in Chicago with about $40 billion in assets under management, according to its website.
Alexander Living, $103M
A joint partnership between Ram Realty Advisors and Kolter Urban sold the Alexander Living apartments in downtown West Palm Beach to AvalonBay Communities for $103 million.
AvalonBay purchased the properties, which include a 20-story, 205-unit rental building called The Alexander as well as a six-story, 85-unit building called Alexander Lofts, according to property records. The deal breaks down to about $355,000 per unit.
Ram acquired the properties through its private equity fund for $5.12 million in 2012. Ram and Kolter completed The Alexander building last year.
The development group converted the Alexander Lofts building, which was built in 1926, into apartments in 2015. It was previously home to Southern Bell Telephone’s regional headquarters.
The Fountains Apartments, $97.3M
Aventura-based Advenir bought The Fountains Apartments in Palm Beach Gardens for $97.3 million from BRT Apartments Corp in January. The sale equals $179,520 per unit.
BRT expects to record a $20.5 million profit on the sale of complex, located at 4120 Square Boulevard, near the intersection of North Military Trail and PGA Boulevard.
The Fountains Apartments have one-, two- and three-bedroom units with monthly rents starting at $1,144, according to the property’s website.
Advenir closed on an $80 million loan the same month it bought the property, which it plans to use for renovations.
The top 5 South Florida multifamily deals in 2018
|Rank||Project Name||Address||County||Sale Price||Buyer||Seller|
|1||Gables Aventura||20081 Northeast 26th Avenue||Miami-Dade||$149,000,000||RREEF Property Trust, an arm of Deutsche Bank asset management||Gables Residential|
|2||Quaye at Wellington||9840 Quaye Side Drive||Palm Beach||$120,000,000||Stockbridge Capital Group||HG Management|
|3||Gables Marbella||22182 Bella Lago Drive||Palm Beach||$112,000,000||Heitman||Marbella Premium Apartments|
|4||Alexander Living||333 Fern Street||West Palm Beach||$103,000,000||AvalonBay Communities||Ram Realty Advisors; Kolter Urban|
|5||Advenir at PGA||4120 Union Square Boulevard||Palm Beach||$97,250,000||Advenir||BRT Apartments Corp|
SOURCE: TRD analysis of brokerage data, as provided by Colliers International, news clippings and market reports.