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New Mixed-Use Project Coming To Allapattah

Coral Gables-based Coral Rock Development Group unveiled plans for Dulce Vida, a transformative mixed-use, mixed-income development in Miami’s Allapattah neighborhood. The project will add to the area’s revitalization and enhance the community’s access to affordable housing options.

Situated on a 1.3-acre site at 1785 NW 35th Street, Dulce Vida is a prime example of Florida’s new SB 102 law aimed at promoting mixed-income developments and increasing access to affordable housing. The project will consist of 200 rental units, thoughtfully designed to cater to a diverse range of residents. Of these, 85 units will be designated as affordable housing at 60% of Area Median Income (AMI), another 85 units will be allocated for workforce housing at 100% AMI, and 30 units for workforce housing at 120% AMI, ensuring a variety of housing options for different income levels.

At the heart of the Dulce Vida project is a new state-of-the-art Miami-Dade Public Library System Allapattah Branch Library, located on the ground floor. This facility will replace the existing Allapattah Branch Library currently at the site and will provide access to a modernized library with the latest library resources, technology, and specialized areas for library users of all ages.

Coral Rock Development Group is proudly partnering with Miami Bethany Community Services, a local nonprofit church deeply rooted in the Allapattah neighborhood, which will play a pivotal role in providing community outreach and involvement initiatives. They will collaborate with residents, local organizations, and businesses to ensure that Dulce Vida positively impacts the community.

“We are thrilled to introduce Dulce Vida, a transformative development that combines the crucial elements of affordable housing, community amenities, and improved access to educational resources,” said Michael Wohl, principal of Coral Rock Development Group. “This project is a testament to our commitment to creating inclusive and sustainable communities that cater to the diverse needs of Miami residents. We look forward to collaborating with the Allapattah neighborhood and Miami-Dade County to make this vision a reality.”

Designed by Behar Font & Partners, Dulce Vida will offer an extensive array of amenities including a state-of-the-art fitness center, a community lounge with a kitchenette and club room for social gatherings, a private conference room, a BBQ area for outdoor cooking and entertainment, an outdoor lounge and games area, a children’s playground, a dedicated dog park, and a parcel package room with lockers for added convenience. The project will also feature electric car charging stations, encouraging sustainable transportation options, as well as bicycle storage and repair facilities to promote eco-friendly commuting alternatives.

“Coral Rock Development Group is not investing in buildings, they are investing in people,” said Commissioner Alex Díaz de la Portilla, City of Miami Commissioner for District 1. “Dulce Vida is a significant contribution to the City of Miami’s attainable housing efforts and will provide much needed housing for low-income residents, as well as law enforcement officers, firefighters, teachers, nurses, and city employees.”

Coral Rock Development Group has particular expertise in developing multifamily workforce housing projects along with mixed-use and affordable developments. Recent projects include Pura Vida Hialeah, Kayla at Library Place, and Card Sound Key Apartments, among numerous others.

Pricing for the rental apartments will begin at $1,084 for studios, $1,161 for one-bedroom units, and $1,393 for two-bedroom units with all prices inclusive of utilities.

Groundbreaking on the project will begin in the third quarter of 2024, with a scheduled completion date at the end of 2025.

During the construction phase, the existing Miami-Dade Public Library System Allapattah Branch Library will be temporarily relocated and continue to operate in a nearby location, ensuring uninterrupted access to its services and resources for the community.

 

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Miami-Dade County Most Competitive Rental Market In U.S.

Miami-Dade County is the most competitive market for renters in the U.S., according to a recent report.

The report from rental listing website RentCafe scored 137 areas across the U.S. based on the average number of days an apartment stayed vacant, the percentage of occupied apartments, the number of prospective renters per available unit, and the lease renewal rate between the months of January and March.

Under that criteria, Miami-Dade County was ranked at No. 1 with a competitive score of 120. According to the report, apartments stayed vacant for an average of only 33 days – the shortest span of any other area in the top 20.

“Given these circumstances, a sky-high 72% of renters in [Miami-Dade] choose to stay put and renew their leases, said Esther Urmosi, communications specialist for RentCafe. “On top of that, 97.1% of apartments are already occupied here, which is above the national benchmark of 94%.”

In RentCafe’s previous report, released in March, North Jersey was named as the most competitive market in the U.S.

Ranked at No. 4 is Broward County where apartments remained vacant an average of 41 days, 95.5% of its apartments are occupied, 67.2% of its leases are renewed and 14 renters compete for each available apartment.

Palm Beach County was the No. 20 most competitive rental market where apartments stayed vacant an average of 38 days, 95% of the apartments are occupied, 11 prospective renters competing for each available apartment and there’s a 59.5% renewal rate.

Another three Florida communities made RentCafe’s top 20 most competitive market list: Southwest Florida (No. 3), Orlando (No. 8), and Tampa (No. 19).

“Developers in Florida have been busy completing new apartments. However, this is still not enough to keep up with pent-up demand, which is why Florida markets are claiming the first spots on our list,” the RentCafe report stated.

 

Source:  SFBJ

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New Apartment Demand ‘All But Evaporated’

Demand for new apartment leases has “all but evaporated” as consumer confidence remains low and inflation continues to rise, according to the latest data from RealPage.

In other words, say farewell to the days of record-high household formations.

“We’ve never before seen a period like this – weak demand for all types of housing despite robust job growth and sizable wage gains,” RealPage Chief Economist Jay Parsons said. “It wasn’t just apartment demand that shot up in 2021 and plunged in 2022. The same pattern played out to varying degrees in other rentals and in for-sale homes.” 

Parsons and his colleagues also note that “while some pundits have suggested demand is slowing due to affordability challenges, there’s not yet any evidence that’s true within the professionally managed, market-rate apartment market,” adding that turnover, while normalizing, is still low and nearly 96% of renters were paying on time as of November 2022.

In addition, “there’s no indication renters are doubling up to any significant degree,” RealPage analysts say. “That may occur later, but as the publicly traded apartment REITs all reported in their last earnings call, it’s not a major factor yet.” What’s more, “there’s no “’flight to affordability’ –meaning that renters aren’t moving down from more expensive units or markets into more affordable units or markets,” according to RealPage. “The drop in demand came across all price points and in essentially all markets.”

According to Parsons, the cause is consumer confidence.

“Low consumer confidence means many American households feel nervous and uncertain, and that has a freezing effect on household formation and housing demand,” Parsons said. “Human nature is that when we feel uncertain, we’re much more likely to stay put – and that’s what happened in 2022.”

Rents for new apartments fell in December for the fourth consecutive month, declining by 0.4%. Rent have dropped by a cumulative 1.6% since September, according to RealPage. The deepest rent cuts were in tech-heavy markets like Austin, San Jose and Raleigh/Durham, as well as cities like Las Vegas, Phoenix and Sacramento, which all benefited from strong pandemic-era in-migration trends.

 

Source:  GlobeSt.

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Miami Area Expected To Add 19,000 Apartments In 2022

Developers are expected to complete 19,125 apartments in the Miami metro area in 2022, according to a new report by rentcafe.com.

Rentcafe also reported earlier this month that Miami remains the most competitive market in the U.S. for renters. In Miami, “the existing supply of rentals simply can’t keep up with sky-high demand,” the website said.

Just two other metro areas are expected to build more apartments than Miami this year: New York (28,153) and Dallas (23,571). By comparison, Miami ranked sixth nationwide in 2021.

The city of Miami itself will see the most new rental units in the metro area this year by far – nearly eight times more than second place Fort Lauderdale, the report said.

For apartments completed within Miami city limits in the first half of 2022, Miami ranked fourth nationwide with 2,996 units. Only Houston (4,746 completed apartments), Austin (4,236 completed apartments), and Seattle (3,232 completed apartments) ranked higher.

Miami’s land area is just 36 square miles, far less than Houston (640 square miles), Austin (320 square miles), and Seattle (84 square miles).

 

Source:  The Next Miami

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CRE Has Biggest-Ever Sales Quarter

Investors purchased $193 billion in commercial real estate during the third quarter, marking a reported record that surpassed pre-pandemic spending by 19%.

Apartment buildings, life-science labs, and industrial spaces to support the e-commerce boom drove the record period, according to data from Real Capital Analytics reported by the Wall Street Journal. The report notes sales of the properties surged so much, they canceled out shrinking office and retail markets and defied dire predictions of the sector’s crash.

The record period is part of a record year for the sector. The Journal reports sales in the first nine months of the year hit $462 billion, 10 percent more than the same time in 2019 and the highest of the same period from any other year.

Investors in commercial real estate previously outpaced pre-pandemic figures in the second quarter, spending $144.7 billion. This marks almost triple the purchases in 2020, but $50 billion less than the most recent purchases.

Data and analytics firm Green Street’s index for tracking property owned by REITs also showed a surge in activity. According to the Journal, the index is up almost 22 percent from its pandemic nadir and 8 percent from pre-pandemic times.

The boom is largely fueled by investors snagging a large number of single properties in a multitude of deals, rather than previous booms featuring plentiful portfolio sales, or sales of entire companies.

Green Street data show the hot commercial real estate market is being paced by industrial real estate and the multifamily market. The Journal reports that the industrial market has soared 41 percent in value since before the pandemic, while the multifamily market has seen a 19 percent increase in value.

The industrial market hit several records in the last quarter, including an all-time low in vacancy and record highs in net absorption and average asking rents.

In addition to new deals, developers in the space are setting records this year. A record 521.4 million square feet of space was under construction in the third quarter and approximately 340 million square feet is slated for delivery this year.

However, the surges in activity aren’t being felt universally across all parts of the industry. According to Green Street data, the value of shopping malls are down 13 percent during the pandemic, while the values of hotels have dropped 4.2 percent and office buildings have dropped 5.6 percent.

 

Source:  The Real Deal

 

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Miami’s Biggest Condo Developer Is Focusing On Apartment Rentals Now. Here’s Why

The pivot quietly began five years ago.

Back then, construction cranes dotted the downtown Miami skyline like the towering alien invaders in Steven Spielberg’s “War of the Worlds.” The real estate industry had recovered from the 2009 recession and was bouncing back hard. Thousands of condos — many of them priced way beyond the reach of local residents — were being delivered or built, completing Brickell’s transformation from office district to dense residential neighborhood.

But Steve Patterson, president and CEO of Related Development, the multifamily rental arm of the Related Group, saw a different picture altogether and started buying up land outside of Miami-Dade.

“I was hired by Jorge Pérez [chairman and CEO of the Related Group] right at the trough of the recession to reactivate the company’s market-rate rental division,” he said. “We like to put the pedal to the metal during a downturn, because costs are lower and the quality of our product is better. There is some softness in the condo market now, and we feel it’s the perfect time right now.”

The Related Group is best-known for its luxury and market-rate condo towers, with an estimated 80,000 condos built, the bulk of them in Miami-Dade. But with a glut of unsold condos dragging down that market, the company is shifting gears and invested $2.3 billion for a wave of apartment rental buildings — both affordable and market-rate — in Miami-Dade and cities such as Tampa, Orlando, and Fort Myers.

This year alone, the company has delivered 3,053 market-rate and 719 affordable/mixed-income rentals in Lantana, Palm Beach and Orlando, including another 204 units in the ongoing $300 million Liberty Square renovation project, which unveiled the completion of its second phase on Friday. Phase I, which opened in July 2019, brought another 204 affordable and workforce units online.

In the pipeline are another 6,772 market rate units in cities including Fort Lauderdale, Phoenix, Atlanta and Jacksonville, all due to break ground between now and the summer of 2021. Another 3,576 affordable and workforce units in mixed-income developments built with the support of local government and federal subsidies are under construction, most of them in Miami-Dade. They include the 120-unit Brisas del Este in Allapattah and the 150-unit Gallery at River Parc in Little Havana.

Related still has more than 1,500 condos under construction or in development in cities such as Fort Lauderdale, Tampa, Sanibel and Jacksonville, but none in Miami-Dade

According to Patterson, all major banks are continuing to provide real estate funding, including Related’s projects. But lenders are being more conservative than in years past, and backing for condominiums is much tougher to secure than that for apartments — another motivator for the company’s pivot to rentals.

Because of the glut of apartment rentals built over the last couple of years in the downtown urban core — nearly 6,000 units since 2014, according to the Downtown Development Authority — Related is steering clear of that area except for one project: The first of three planned towers at 444 Brickell, a four-acre site the company bought in 2013 for $104 million, will be a 40-45 story tower with 500 apartment rentals. Groundbreaking is scheduled for first quarter of 2021 and will take 30 months to complete. In total, the company has 1,500 condo units in the pipeline in Florida, Brazil and Cancun, Mexico.

A NATIONAL TREND

Related’s switch to apartment rentals is a continuation of a national trend that’s been happening for the last few years.

“The biggest driver of apartment construction is the home ownership rate,” said Gerard Yetming, executive managing director of the Urban Core Division of Colliers International. “Home ownership peaked in 2005 at 69% and it’s been trending down every year. So it makes sense there would be a growing demand for rentals and that Related is pushing into that area. The question is will it be a long-term trend. What you’re seeing right now is really just a result of big economic trends that are cyclical.”

Over the last 20 years, home ownership in the U.S. peaked in 2005 at 69%, according to Statistica, and hit a low of 62% in 2015. The percentage inched back up to 65% in 2019. But the U.S. population also grew during that time, from 296 million people to 328 million in 2019.

“The government created the notion that owning a home was the American dream,” Patterson said. “It proved to be beneficial to most people who bought homes until we saw the spike in prices in the last cycle. A lot of millennials saw their parents lose a lot of money.”

The housing bubble burst in 2008, when the bottom fell out of the real estate market, resulting in 2.3 million foreclosures and a loss of $2 trillion in home values in that year alone.

 

Source:  Miami Herald

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Apartments With Ground Floor Retail Take A Hit On Rent Collections

COVID-19 precipitated shutdowns have crippled the retail sector and those troubles have been well-documented.

And the businesses that rent spaces on the ground floors of apartment buildings are generally not big stores or national chains and have had even more trouble meeting their obligations in recent months. As a result, multifamily owners have had to be forgiving in negotiating concessions with their retail tenants, even as rents from apartment tenants have generally held up better than expected.

“We know that small retail businesses have been hit very hard based on payroll figures,” says Kevin Cody, market analytics senior consultant for CoStar, based in Boston. “Their distress from the pandemic was likely amplified due to them having small cash buffers.”

The vast majority—over 80 percent—of the retail space located in apartment buildings can be found in urban areas, according to CoStar. In recent years, these areas were performing well due to strong demographic growth, employment growth, and high levels of tourism, says Cody.

That strong performance stopped with the spread of the coronavirus in early 2020.

“Retail assets in dense, urban areas have been heavily impacted by the current period,” says Cody. “People are working from home at a high rate and tourism has greatly diminished.”

Not surprisingly, the retail tenants that have held up the best for apartment owners in recent months are those that were deemed essential. Drugstores, convenience stores, restaurants equipped to do takeout business are among tenants that been able to continue operating amid the vary levels of shutdowns throughout the country.

From the landlord side, apartment owners have largely been willing to work with their retail tenants on an as-needed basis.

“We have heard that owners of retail space are offering rent deferrals or relief to some tenants that have been impacted by the virus,” says Cody.

“There [usually] isn’t a public balance sheet or strong capitalization,” adds Todd Siegel, senior vice president, CBRE, based in Chicago. “The solution to mutual success requires an individualized and bespoke approach.”

Fortunately, apartment properties generally don’t rely much on the income from  small retail tenants.

“On a pure, net operating income basis, it shouldn’t skew the balance sheet to warrant a default,” says Siegel. “Mixed-use retail in general doesn’t drive the overall value [of an apartment property].”

The managers of apartment properties are also not yet desperate to squeeze money where ever they can get it. That’s because the income from apartment rents has remained strong, so far.

“I would expect apartment owners to have a greater ability to offer rent deferral or relief for their retail tenants, due to the greater rate at which they have been able to collect rent from apartment renters,” says Cody.

As for down the line, while they will need to implement social distancing measures until a vaccine or reliable treatment becomes available, multifamily owners will continue to include ground-level tenants.

“Mixed-use was a strategy we really liked heading into the pandemic,” says Cody. “In the long-term we still believe in it… we expect urban areas to come back, but in the near to medium term, retail will experience reduced spending and foot traffic. We expect migration to slow; there has been a shift to working-from-home, which will sustain to some extent; and tourism has slowed, which will take time to recover.”

 

Source:  NREI

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Miami Adding 7,000 New Apartments This Year, More Than Any Other U.S. City

Miami is the top city in the U.S. for new apartment construction in 2019, according to new statistics from Rentcafe.

A total of 6,989 new apartments will be built in Miami by the end of the year, more than any other U.S. city.

The number of new apartments is more than double what was delivered last year. A total of 3,148 units were built in Miami in 2018.

Miami is unusual compared to other U.S. cities, since most new apartment construction is concentrated in the urban core (generally within city of Miami limits).

In the Miami Metro area, a total of 13,031 apartments are expected to be delivered in 2019, ranking fourth among metro areas nationwide.

 

Source:  The Next Miami

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