A $225 million transaction in Pembroke topped the multifamily stats for this year. The sale was for a 1520-unit community known as the Resort at Pembroke Pines. The sale was completed by the Carroll Organization, out of Atlanta.
Although the property was a bit rundown and outdated, the Carroll group developers were still interested in picking up this apartment complex, despite the fact that it is not quite as modern or stocked with amenities as newer complexes. This demonstrates that investors are interested in apartment complexes that already exist, rather than just having an interest in developing new apartment complexes.
Lower The Risk
According to reports, the prices of land in Florida have been going up and the costs of development have been going up, but growth as far as rental income goes is slowing. This means that, for developers, there is less risk involved in purchasing existing properties than there is in developing new properties, a process which can take two or three years to complete. The reporting states that, of course, in two or three years, the market can be remarkably different than it is at the time the development starts, adding an element of risk to the investment.
While growth in the Miami commercial real estate market may be picking up, economic indicators show that the typical cycle of booming and busting in the South Florida real estate market may be between 7 and 12 years. With investors moving in from all over the world – Latin America, Russia, Europe, etc. it has proven to be particularly rich with people looking to make investments in South Florida real estate – real estate prices have largely stabilized and luxury properties are selling well again.
What’s Out There
South Florida may be principally known for its very high-end, upscale luxury real estate properties, but there are still many distressed properties on the market and, as this transaction shows, properties that may be a little bit outdated, but that could become very attractive provided they were given a bit of renovation. For some commercial real estate developers, it’s more attractive to invest in a property such as these, simply because they do not have to go through the development process or take on any of the extra risk associated with that process.
As the South Florida real estate market continues to grow, there are likely to be many very attractive deals that come available on the market, but it generally requires a skilled real estate agent for clients to be able to take advantage of these properties. We provide a list of Miami’s most expensive condos and Miami’s most expensive homes for sale and give forecasts about the market in general, both of which should be of great interest to individuals looking to invest in the luxury properties available in a South Florida market or, in fact, some of the older properties that could be very good investments with a little bit of redevelopment.