Miami Apartment Market Attracts Investor Interest

MIAMI-The local apartment market is capturing investor interest, although closings are down because not many properties are listed for sale, according to a new report by Marcus & Millichap Real Estate Investment Brokerage Co. Miami ranked 17 last year on the company’s 2004 National Apartment Research Report’s National Apartment Index and is predicted to come in at No. 21 next year.

The local market’s 2003 apartment sales did not measure up to the $700 million in 2002 sales; however, prices showed a notable increase. The median price per unit last year was about $53,400, compared with $48,055 the year before. The median unit price in the Northeast Dade submarket climbed from $38,000 in 2002 to $46,000 last year. The submarket is in demand because of its location near the ocean and Fort Lauderdale, the report states. The median unit price in the Miami submarket increased from $39,000 to $43,000 for the same time period.

Buyer interest in multifamily assets also lowered cap rates in the market, as the average fell from around mid-8% to about mid-7% in the last year. This year, though, as interest rates increase, cap rates are expected to stabilize. Competition for properties will result in higher unit prices.