Miami’s roller coaster real estate market is booming again after its worst crash left dozens of unfinished buildings and failed condo projects.
Related Group of Florida, Adler Group and Area Property Partners LP, are among builders developing amid a shortage of rental properties as the economy improves. The average rent for a two-bedroom apartment increased 6 percent to $2,568 a month in the third quarter, compared with the year ago period, according to Condo Vultures LLC, a brokerage and consulting firm.
“There’s a boom in Miami that we’ve never seen before,” said Stephen Ross, chairman and founder of New York-based Related Cos. and owner of the Miami Dolphins football team, at the Bloomberg Commercial Real Estate Conference in New York on Nov. 13. “Miami is probably the hottest real estate market in the U.S. from a residential perspective.”
Between the real estate trough and the middle of this year, price per buildable unit -- the price of land per number of units that are entitled to be constructed on it -- in Miami jumped 155 percent for multifamily developments, according to Real Capital Analytics Inc.
“If developers are paying more on a price-per-buildable- unit basis, that means they believe that after construction is complete, the property will be worth sufficiently more than the sum of the price of the land and the cost of construction to justify the risk the developer is taking,” RCA analyst Ben Thypin said.
Price per buildable unit climbed to $75,028 during the recovery starting in 2011 through July from $29,455 between the trough between 2008 to 2010, RCA said. Baltimore followed in second place with an 87 percent increase from the trough to the recovery and Philadelphia in third with a 74 percent climb, according to RCA.
Read More: http://www.businessweek.com/news/2012-11-19/miami-booms-like-never-before-on-rental-demand-mortgage
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.