The market for new multifamily construction in South Florida is shifting as developers look to sell their sites after a period of rapid expansion during the pandemic. Rising costs for land, financing, and construction have contributed to this change, along with increased concessions needed to attract tenants. The completion of many projects in 2023 and 2024 has led to slower rent growth and even declining rents in some neighborhoods.
Developers say that high costs are not the main reason for listing their properties. “Some of these guys bought at the top of the market. They were overleveraged, and they thought everything ws going to keep being peachy, that the rents would be peachy, that with Trump being in power, interest rates would have dropped,” said Miguel Pinto of Apex Capital Realty. “None of that has happened.”
Not all developers are publicly marketing their sites, but many would consider selling if they receive suitable offers. According to Sebastian Faerman, a commercial broker at Fortune Christie’s, those who have not started construction recently are unlikely to begin building during this cycle.
Some owners never intended to develop their sites but instead planned to buy, obtain entitlements, and sell at a profit. This includes those leveraging Florida’s Live Local Act, which allows increased density and height for workforce housing projects.
In Wynwood, Clara Homes listed its site—formerly home to Austin Burke menswear—for nearly $11 million after buying it for $7.7 million. The company secured approval for a 22-story tower under the Live Local Act but decided to sell instead. James Curnin of Clara Homes commented on his decision: “I just want to move to bigger and better things.” He also mentioned delays in site plan approvals as an issue faced by many developers.
Other notable transactions include Patrick K. Willis selling a Fort Lauderdale mansion for $27.4 million to Michael Andretti and Favo Capital acquiring a Hollywood apartment tower for $190 million through an all-stock deal with GCF Development.
Spec home developer Todd Michael Glaser and the Posner Group are attempting to flip a Miami Beach estate purchased for $105 million in July for $169 million or rent it out at $495,000 per month while planning a potential new mansion project valued up to $300 million.
Florida’s population reached 23 million last year and is projected by the Demographic Estimating Conference report to surpass 24 million by 2027; however, overall growth is expected to slow over the next few years.
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