At the Miami Finance Forum’s recent panel discussion regarding the current status of South Florida commercial real estate, panelist commercial developers stated they are responding to strong tenant demand across all sectors. While all agree that the South Florida commercial real estate market, and especially multifamily rental, has appreciated substantially since the recession, the debate among experts centers around the question of whether the market has peaked, or still has some runway. The response to this question varies by expert and can be segmented into particular asset subclasses or geographic submarkets. Notwithstanding, no panelist categorized the market as recessionary. Instead, they view the market as a stable plateau after sustained significant year-over-year appreciation.
A large portion of the discussion focused on multifamily rentals. In regards to multifamily, the market drivers for apartments are at opposite ends of the generational spectrum. Apartment-development flow continues to be driven by two demographic sectors. The first are millennials, who in the post-recession environment face a credit crunch and cannot afford to yet achieve their dreams of suburbia. In addition to millennials, baby boomers are also driving the market as they no longer want the hassle of maintaining a home. Continue Reading