The report also shows that consistent employment growth and population have helped maintain strong tenant demand, and capital will continue to be drawn into the area's multifamily market. In addition, area rents should continue to rise. "South Florida's multifamily investment marketplace has shown vibrancy in 2003, with median prices up throughout the region," Gene A. Berman, senior vice president and regional manager of the company's Fort Lauderdale, FL, office, states in the report. "The market forecast calls for vacancy to peak in 2004 and wane thereafter, and rent growth to persist, indicating an attractive investment market that will fuel asset appreciation."

The regional vacancy rate is expected to increase to approximately 6.9% at the end of this year from 6.1% last year; an extra 40-basis-point hike to 7.3% is predicted for next year. All three metropolitan service areas in the South Florida region reported increasing vacancy rates this year. Fort Lauderdale rose from 5.3% to 6.2%, while Miami grew from 5.5% to 6.4%, and West Palm Beach went from 8.7% to 9.2%.

Meanwhile, South Florida asking rents continue to increase as well. The average should grow 2.8% from about $958 a month this year to $979 a month next year. This year, the strongest growth was in Fort Lauderdale, where rents should end up increasing 3.6%. Effective rents rose 1.8%. In Miami, asking rents increased 3.4%, and effective rents grew 2.5%.