This is the conclusion of a third quarter report on apartment market trends prepared by Grubb & Ellis Co.
According to the report, the Sept. 11 terrorist attacks have not affected developers strategic plans to develop new properties in South Florida, as demand continues to outpace supply.
But Sept. 11 has caused come concern for investors and owners. They are concerned about their ability to obtain adequate insurance coverage at an affordable price, since future policies are expected to exclude damages resulting from acts of terrorism as well as acts of war.
According to the report, the average occupancy rate for South Florida's large rental communities (having at least 100 units) for the quarter ending June 2001 was 97.2%, one of the highest in the country. Street rents increased by 3.3% to $886 per month from Dec. 2000 through June 2001.
Although third quarter occupancy rates and rents are not yet available, Grubb & Ellis senior vice president Rosendo Caveiro tells GlobeSt.com that he expects no significant change from the first half of the year.
"The only difference in the second half of the year will be a lower number of sales because there is less product available," says Caveiro. "There is no great motivation to sell, since the occupancy rates are so high."
According to the report, the level of sales activity slowed during the third quarter, but prices continued to escalate. Eighteen rental communities with 3,785 units were sold in Miami-Dade County; 18 communities with 4,557 units in Broward County; and nine with 2,369 in Palm Beach County.
A prime example of top-of-the-market prices was the acquisition by Draper & Kramer of the four-year-old Village by the Bay at Aventura for $155,750 per unit or $134 per sf.
The report predicts that during the coming year, 65% of the new rental communities in Miami-Dade County will be in the urban areas of Miami and Miami Beach.
In Broward County, completion of new units this year is projected to be at the lowest level since 1995, but development is expected to increase next year. The number of new units planned for Palm Beach County next year is at an all time high, with the majority located within the Central/North Palm Beach County area.
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