Since the housing meltdown, more South Floridians are renting a place to live because the financial reality is they can?t buy.
A lot of other people simply prefer to rent.
The two groups are spawning a fundamental shift in housing and a fledgling boom in the construction of new apartments for the first time in years. It is a national trend that is crystallizing in South Florida with rental apartment projects in the works in cities ranging from Plantation and Davie to Doral and Coral Gables.
?Rentals will be in demand for a while. The pendulum has swung,? said Mahesh Pattabhiraman, chief lending officer for Miami-based Apollo Bank, which this month made a land-acquisition loan to Miami?s Adler Group, a major commercial developer that plans to build two 20-story rental apartment towers near the west end of 79th Street Causeway in a joint venture with ECI Group of Atlanta.
?A lot of people with bad credit won?t qualify to buy a home. And because of the crisis, some people are not convinced it?s the right time to buy,? added Pattabhiraman.
Like Adler, other major South Florida developers with specialties in areas such as luxury condominiums and industrial parks are refocusing on rental apartments to capitalize on the strong demand and the availability of financing.
?Everybody is jumping on the bandwagon,? said Armando Codina, a prominent Miami developer of industrial parks and commercial projects who has turned his attention in a big way to rental apartments, with projects in various stages from Doral to Davie. ?The fundamentals are right. This is not a trendy thing,? said Codina.
On Wednesday, Codina announced his Coral Gables-based CC Residential has formed a partnership with AREA Property Partners, a New York real estate investment giant, to develop rental apartment projects in South Florida. The alliance includes two projects in which Codina has already broken ground: a 352-unit project renamed The Signature at Doral, at Doral Boulevard (NW 41st Street) and the Homestead Extension of Florida?s Turnpike, and a 350-apartment project on Davie Road between SW 29th Street and SW 31st Street, renamed The Signature at Davie.
AREA?s CEO for North America, Richard Mack, said his firm?s recent success in building and leasing an apartment project on the Miami River called Terrazas River Park Village reinforced his view that the time is right for multifamily rental development. ?It led us to conclude that rents are going to continue to rise and demand is going to continue to rise in a way to sustain new development,? Mack said.
Fueling the demand is the dearth of professionally managed apartment buildings in the wake of the condo-conversion mania of the last decade. Many multifamily rental apartments in the region were snapped up by developers, converted into condos and sold for quick profits.
Aside from a handful of rental apartment projects built during the boom, much of the rental availability in South Florida is in condominiums where investors bought units and are leasing them out.
Rental rates are marching steadily higher. Rents jumped 11 percent in downtown Miami from the first quarter of 2011 to the first quarter of 2012, according to Craig A. Werley, president and CEO of Focus Real Estate Advisors LLC. Rents are rising in other neighborhoods as well, though typically more modestly.
Article source: http://www.miamiherald.com/2012/05/16/2802752/rental-sweet-rental-shift-toward.html
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