SOUTH FLORIDA

MULTIFAMILY
2021 FORECAST
 SOUTH FLORIDA
MULTIFAMILY MARKET UPDATE
POSITIVITY REFLECTS MARKET SENTIMENT.
SIX MONTHS AGO IT REFLECTED COVID CASES.
In the space of less than 12 months, the South Florida
multifamily market went from near record sale activity,
to virtually no sale activity and back to near record sales.
Miami-Dade and Broward experienced record average per unit
sales in 2020 ($233,000 and $225,000 per unit respectively)
and Palm Beach was the second highest average per unit sales
ever recorded ($170,000 per unit). Positivity now reflects
sentiment, whereas six months ago it reflected Covid cases.
While the region still has not recovered all the jobs lost
from Covid, the V shape recovery model does apply to the
South Florida multifamily market. South Florida is awash
with out-of-state private capital looking to invest in the
multifamily market and it will further increase in 2021.
Although bullish conditions prevail challenges remain.
In this edition of the Weaver Report, we have highlighted
key analysis which will shape the market going forward.
MULTIFAMILY SALES
• In 2020 there were 254 multifamily sales totaling $3.1 billion.
Despite almost six months of no sale activity from April
through September total sale volume was only down 15% from
2019. Miami-Dade and Broward witnessed record average per
unit sales and Palm Beach was the second highest average
per unit sales.
• Overall sales decreased for a fourth year in a row from the
record of 2016. There are fewer deals available in the market
which has slowed sale volume. The biggest challenge is
finding viable acquisition opportunities with more buyers
than sellers in the market.
• For the third year in a row Broward County witnessed the lion
share of sale activity with a total of 46.7% or $1.44 billion in
sales.
• We anticipate sales volume to increase in 2021. Out of state
private capital buyers are the most active in the market.
• Approximately 75% of all sale activity occurs in product built
1980 or newer. Sale activity began shifting to newer product
as many of the newly constructed multifamily buildings
stabilized and sold to investors. With almost 25,000 units
under construction, we expect this shift to continue with
strong newly constructed apartment sales in 2021 and
beyond.
• Value-add remains. One of the concerns from Covid-19
was value-add buyers would go into hibernation. Would
buyers still underwrite rent upside through value add? The
overwhelming answer is yes. There remains huge investor
appetite for value-add properties, but there are limited
acquisition opportunities.
THE SIXTH BOROUGH
• At the beginning of 2020, the WeaveReport highlighted
the amount of New York investors seeking multifamily
opportunities in South Florida. Covid-19 poured rocket fuel
on this trend.
• Whether relocating or investing in South Florida, New York
capital is here at unprecedented levels.
• The same principal applies to other out of state investors
specifically California, Washington, New Jersey and Illinois.
• Out of State, private capital investors are the most active
in the market. Deal activity in the sub $50 million range is
seeing the highest level of activity. Investors are seeking 6%
levered cash-on-cash returns. IRR’s are 12-14% but cash-on-
cash is king.
CAP RATES AND UNDERWRITING ASSUMPTIONS
Covid-19 caused a hard reset in underwriting and valuations.
Several months of strong occupancies and collections coupled
with readily available attractive agency debt provided the
backbone for deals to occur and the new paradigm of valuations.
Several key themes have emerged:
• At the time of writing, the 10-year treasury is around 1.4%
which is in line with where it was in February 2020. In August
2020, it was as low as 55 bps. On agency small balance loans
with a 70% LTV, overall interest rates ranged between 3.3%
to 3.5%
• Record low interest rates in 2020 put downward pressure
on cap rates, which was offset by more conservative income
assumptions.
• Despite dipping to near record lows in Summer 2020, cap
rates are in line with where they were pre Covid-19. Investors
are bullish on a return to the “new normal” and are factoring
in rent growth and lower bad debt write-offs.
• Cap rates today range between 3.7%-4.1% for Class A
properties. Class B and C cap rates are ranging between
4.25% to 5.25%.
• Levered cash-on-cash returns is the preferred metric used by
the most active private capital investors
RENTS
• Broward and Palm Beach Counties witnessed the 12th
consecutive year of record rents. Rents decreased by 1.1% in
Miami-Dade in 2020.
• Renewals levels remain high with tenants less likely to move.
Due to Covid-19, most owners are keeping rents flat on
renewals.
• Rents for 2021 will largely be driven by how quickly the job
market improves or additional stimulus is provided.
VACANCY RATES
• All three counties witnessed higher vacancies in 2020.
Vacancies in Miami-Dade are 7.1%, Broward 7.7% and Palm
Beach 7.8%
• The higher vacancy was attributable to 12,605 new units
being delivered to market in 2020. Net absorption for the
same period was 7,049 units which resulted in the vacancy
increase.
MULTIFAMILY INVESTMENT SALES ANALYSIS | SOUTH FLORIDA
GRAPH 1 :: SOUTH FLORIDA HISTORICAL PRICE/UNIT
SOUTHVERSUS
FLORIDA PRICE/SF
HISTORICAL PRICE/UNIT VERSUS PRICE /SF
$250,000 $240
Miami-Dade
$220
$225,000
Broward $200
$200,000
Palm Beach $180
$175,000
$160

$150,000
$140
Price per Unit

Price Per SF
$125,000 $120

$100
$100,000

$80
$75,000
$60
$50,000
$40

$25,000
$20

$0 $0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Average per Unit Average Per SF

* $1MM+ multifamily sales Source: Cushman & Wakefield

SOUTH FLORIDA HISTORICAL TRANSACTION VOLUME VERSUS NUMBER OF TRANSACTIONS
GRAPH 2 :: SOUTH FLORIDA HISTORICAL TRANSACTION VOLUME VERSUS NUMBER OF TRANSACTIONS
$6.0 375
Billions

Miami-Dade
$5.5
Broward
$5.0
Palm Beach 300
$4.5

$4.0

Number of Transactions
225
$3.5
Dollar Volume

$3.0

$2.5
150

$2.0

$1.5
75
$1.0

$0.5

$0.0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Dollar Volume Number of Transactions
* $1MM+ multifamily sales Source: Cushman & Wakefield

• There are another 14,758 units scheduled for delivery in 1) New rental supply is quickly absorbed. In the last five
2021. Short-term new supply will outpace absorption and years, there were 44,275 units built. During this time,
vacancies will likely increase. This will likely be confined to we have experienced record rents and near record low
more urban markets and Class A product. vacancies. The new supply thus far has not adversely
affected the market and most of the new supply has already
• Class B and C properties have the lowest vacancy levels
been delivered.
but have lower collection amounts.
2) The market is playing catch up. In the 90’s and 2000’s
RECORD NUMBER OF UNITS UNDER CONSTRUCTION
there was very little multifamily development. Developers
• There are 24,702 units under construction in South Florida.
focused on condo development during this period and
This represents 7.9% of the current apartment inventory.
the market was starved of new multifamily supply. New
multifamily construction is needed to fill the void in the
marketplace.
• In the past five-years, net absorption in South Florida
3) Condo conversions. Condo conversions in the mid 2000’s
averaged 7,200 units per year meaning upcoming
eliminated over 20,000 net rental units in South Florida.
completions will outpace absorption causing certain
submarkets to experience slower lease-ups, higher 4) Population growth. In the past four years South Florida’s
concessions and downward rental pressures as several population increased by 167,760. During the same period,
new buildings will be delivered in a short duration. 34,081 new apartment units were built. This means one unit
has been built for every 4.9 net new people to the region.
• In the short-term new supply will outpace net
Over the next five years, South Florida is expected to see
absorption. However, as explained in previous
a positive net migration of 310,715 people. Using the same
market reports we do not believe the multifamily
ratio, the region would need over 63,000 new rentals to
faces an oversupply of units. Key reasons include:
keep pace with the population growth for the next five
years.
3
 GRAPH 3 :: SOUTH FLORIDA ASKING RENT VS VACANCY RATE
ASKING RENT VS VACANCY RATE
$2,000 10.00%

$1,800

$1,600
7.50%
$1,400

$1,200

$1,000 5.00%

$800

$600
2.50%
$400

$200

$0 0.00%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Asking Rent Vacancy Rate

RENTAL DEMAND FUELED BY POPULATION GROWTH • The median home price in South Florida in 2020 was
• We anticipate demand for multifamily rentals will increase almost $400,000. With 5% down, the mortgage would be
post Covid-19 as South Florida becomes a hotbed of around $2,300 at that price, which is ±$600 more than the
population growth from people migrating from other average rent in the market.
states due to the business-friendly environment and
JOBS. JOBS. JOBS.
workers who can operate remotely choosing South Florida
as their new home. • The South Florida unemployment rate is 6.7%. At the
beginning of 2020 the unemployment rate was 2.3%. In
• New household formations - the number of new households
the space of six months the South Florida unemployment
created each year. Household formations in South Florida
rate soared from a 50-year low to a record high in April
are expected to increase to over 44,000 each year in the
of 13.4%. The unemployment rate has decreased to half
next five years. Assuming, this projection materializes, at
the record high from 2020 but still almost three times
60% enter homeownership and 40% as renters (consistent
higher than pre Covid-19. Encouragingly, many of the job
with historic homeownership rates) that represents over
losses that occurred in 2020 were not permanent despite
17,000 new renters per year in South Florida.
the virus continuing to impact consumer and business
demand for almost a year.
HOME PRICES CONTINUE TO INCREASE • Median incomes modestly grew by 0.6% in Miami-Dade,
• The median home price in South Florida increased by 9.5% 0.4% in Broward, and 7.3% in Palm Beach.
in 2020 to $395,289.
COLLECTIONS/EVICTIONS
• Covid-19 has contributed to a resurgence in the single-
• Florida’s “open for business” mentality has significantly
family market In South Florida. Some renters that could
contributed to businesses ability to reopen and provide
afford to move into ownership used Covid-19 as the
employment.
impetus to make the move. In the past two years, the
homeownership rate in South Florida increased from • Collections on most properties are in the low to mid 90%
57.9% to 60.4%. This is still significantly below the 2005 range.
Homeownership rate of 69.2%. • Eviction moratoriums remain in effect for South Florida.
• Average home values are increasing at greater rate than Whenever the eviction moratorium is lifted a wave of
rents, making ownership for many even tougher. nonpayment and/or evictions will likely back log the courts.

UNEMPLOYMENT RATE
14.0%

Miami-Dade Broward Palm Beach South Florida

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%
11.8%

11.8%

10.2%

12.6%
3.8%

4.2%

4.4%

7.8%

6.6%

7.3%

6.6%

5.5%

0.0%
1Q2020 2Q2020 3Q2020 4Q2020
4
 SOUTH FLORIDA HISTORICAL & FUTURE DELIVERIES
GRAPH 4 ::SOUTH FLORIDA HISTORICAL & FUTURE DELIVERIES

16,000
14,758

14,000
12,605

12,000
10,194
10,000
8,937
8,365
# of Units

8,000 7,556 7,326

6,320 6,381 6,158
6,000

4,000
2,519
2,000 1,579
756

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
*Forecasted construction deliveries are as of Jan-2020. Actual deliveries may vary

• Class C properties have the highest rent delinquency
challenges. This is consistent with the theme that Covid
has had a disproportionally negative effect on lower
income households.
• Owners who took mortgage forbearance on GSE-backed
multifamily assets are exempt from filing evictions for
nonpayment of rent.
LOOKING AHEAD
Vaccines are here. The job market has improved tremendously
(but not equally). We are not out of the woods, but there is
a clear path forward. General sentiment is the worst is in the
rear-view mirror.
The good news is the market is ideally positioned for continued
long-term growth. Multifamily and industrial are the two
commercial real estate sectors that will come out as strong
performers from Covid. Bubble territory in the stock market
and other commercial real estate sectors facing challenges,
South Florida multifamily will benefit.
The South Florida multifamily fundamentals are, and will
continue to be, the single biggest driver of performance in
the market. Strong collection and occupancy performance
through a pandemic, population/household growth, low
homeownership rates, higher home prices, improving job
market, higher wage growth, limited land and a wonderful
lifestyle all contribute towards a sustainable long-term
growth. Positive market fundamentals coupled with realistic
underwriting and financing analysis will keep the market in
equilibrium.
TRENDS TO FOLLOW IN 2021 INCLUDE:
• Private capital investors will continue to dominate the
market. Their portfolios will have more multifamily and less
office and retail
• Interest rates will remain low. Interest rates have increased
from mid 2020 but there is no short-term concern of rates
going much higher
• Population growth. Official figures have not been released
but expect South Florida to be one of the biggest
population gainers from Covid.
• More capital in short term rent growth markets with cash-
on-cash focus and not IRR
• Urban apartments will underperform in 2021/2022 but
outperform over 5-7 years. Any reader of the WeaveReport
knows I have always pushed the suburb submarkets despite
the trend in previous years being urban. Conversely, with
everyone talking about the suburbs as the new hip location
for renters, now is the time to pivot back to urban. Over
a 10-year perspective, many urban deals have excellent
entry points for buyers.
• Alternatives such as senior, affordable and single-family
rentals see a continued surge of capital
• Multifamily transaction volume will increase by 30%
• Speed of due diligence timing will become differentiator
for many buyers.
• Lose the loss-to-lease. Opportunities that have loss-to-
lease with wide variations on rents for identical units will
have more immediate upside by burning off loss-to-lease
on underpriced units.
• Conversion of Hotel/Retail Space to Multifamily.

5
 MIAMI-DADE MULTIFAMILY MARKET SUMMARY
$990M $9,550,000 $210 $233,408
2020 Sales 2020 Average Sale Price 2020 Average Sale PSF 2020 Average Sale Per Unit

$1,669 92.8% 3,252 131,157

Average Rent Per Unit Occupancy Rate Annual Unit Net Absorption Inventory of Rentable Units

ASKING ASKING EFFECTIVE

# OF TOTAL # ASKING EFFECTIVE EFFECTIVE NET NEW
YEAR $ SALES VOLUME RENT RENT RENT VACANCY
SALES OF UNITS RENT RENT RENT PSF ABSORP UNITS
PSF GROWTH GROWTH

2020 $991,516,276 104 131,157 $1,669 $1.91 -0.4% $1,640 $1.88 -1.1% 7.1% 3,252 5,392

2019 $978,537,978 166 125,765 $1,676 $1.92 2.1% $1,659 $1.90 3.1% 5.7% 2,132 3,494

2018 $928,079,661 154 122,279 $1,642 $1.88 2.3% $1,609 $1.84 2.2% 4.8% 3,491 1,933

2017 $1,523,494,218 159 120,346 $1,605 $1.84 2.2% $1,574 $1.80 2.1% 6.1% 2,485 3,223

2016 $1,411,028,489 174 117,123 $1,570 $1.80 2.5% $1,541 $1.77 1.6% 5.7% 4,414 5,939

2015 $841,890,975 163 111,184 $1,532 $1.76 3.3% $1,517 $1.74 3.2% 4.6% 3,310 3,200

2014 $483,194,053 178 107,984 $1,483 $1.70 2.6% $1,470 $1.68 2.6% 4.8% 1,932 2,399

2013 $436,103,760 114 105,585 $1,446 $1.66 3.2% $1,433 $1.64 3.1% 4.5% 2,215 2,177

2012 $429,347,926 82 103,408 $1,401 $1.60 3.0% $1,390 $1.59 2.8% 4.6% 462 805

2011 $138,046,282 56 102,603 $1,360 $1.56 1.1% $1,352 $1.55 1.1% 4.3% 795 712

Miami-Dade Apartments Under Construction

52
# OF EXPECTED
BUILDING CITY
UNITS COMPLETION
apartment buildings

13,790
Park Vista Hialeah 212 2021

Reflections Little Havana 142 2021

totaling
units under construction Luma Downtown 434 2021

in Miami-Dade AHS at Tamiami Kendall 264 2021

Plaza at Coral Gables Coral Gables 169 2021

Miami-Dade Deliveries Versus Absorption

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net Absorption (Units) Deliveries (Units)

6
MIAMI-DADE MULTIFAMILY MARKET SUMMARY* CONTINUED

ASKING RENT ASKING RENT NET DELIVERED UNDER

SUBMARKET UNITS ASKING RENT VACANCY
PSF GROWTH ABSORPTION UNITS CONSTRUCTION

Aventura 2,157 $1,877 $1.81 -1.9% 4.8% 30 - 0

Bal Harbor/
Miami Beach
7,991 $1,324 $2.02 0.7% 6.3% -41 - 53

Brickell/Downtown 14,892 $1,472 $1.88 -1.5% 6.2% -209 - 6,112

Coconut Grove 2,173 $1,831 $2.16 -0.7% 11.1% 186 352 130

Coral Gables 8,073 $2,079 $2.40 -1.1% 9.5% 441 626 1,308

Hialeah/Miami Lakes 18,871 $1,431 $1.61 1.0% 3.3% 65 126 519

Homestead/
South Dade
7,816 $1,370 $1.55 2.2% 7.8% 1,069 1,128 1,652

Kendall 12,960 $1,655 $1.84 -1.3% 6.9% 318 175 914

Miami Gardens/
Opa Locka
17,129 $1,386 $1.67 1.5% 7.1% 590 838 910

Miami Springs/Doral 18,968 $1,824 $1.94 -1.6% 10.1% 926 1,654 1,195
North Miami/
North Miami Beach
16,596 $1,423 $1.73 2.1% 7.9% -207 248 961

Outlying
Miami-Dade County
934 $1,761 $1.46 3.1% 11.5% 172 245 0

Westchester/Tamiami 2,597 $1,382 $1.83 1.5% 4.8% -88 - 36

TOTAL/AVERAGE 131,157 $1,669 $1.91 -0.4% 7.1% 3,252 5,392 13,790

• In 2020, there were 104 apartment sales totaling $992 million with an average price of
$233,408 per unit or $210 per square foot. This is the highest average sale per unit year and
the second highest average price per square foot in Miami-Dade.
• Despite Covid-19, sale activity increased from 2018 and 2019 and was the third highest dollar
volume activity ever recorded in in Miami-Dade.
• For the first time in 12 years, rent growth decreased in Miami-Dade. Asking rents decreased
by 0.4% to $1,669.
• Coral Gables has the highest average rent of $2,079.
• Suburban locations experienced rent growth and urban submarkets marginal rent
decreases.

• In 2020 vacancies increased from 5.7% to 7.1%. This is the highest vacancy levels in over ten
years. New supply outpacing absorption caused the vacancy increase.
• Highest vacancy rates are Doral, Coconut Grove and outlying Miami-Dade.
• Lowest vacancy rate is in Hialeah/Miami Lakes.

• There are 52 buildings totaling 13,790 units under construction. This represents 10.5% of the
current inventory in the market.
• In the past five years, 19,981 units were delivered to the market.

• In 2020 net absorption was 3,252 units. Newly completed units totaled 5,392 units resulting
in the vacancy increase.
• Homestead/South Dade had the highest net absorption with 1,069 units. Downtown/
Brickell and North Miami/North Miami Beach had negative net absorption a little over 200
units each.

• 7.3% unemployment rate.

• In 2020 median salary income increased by 0.6%.
• $425,411 median house price.
• The population grew by 43,800 in the past four years, and 0.7% in 2020.

*Data as of Jan-2021, apartment sales of 10 units or more, in excess of $1MM in pricing, excluding all condo sales
Source: CoStar
7
 BROWARD MULTIFAMILY MARKET SUMMARY
$1.44B $13,000,000 $186 $224,600
2020 Sales 2020 Average Sale Price 2020 Average Sale PSF 2020 Average Sale Per Unit

$1,673 92.3% 2,493 119,778

Average Rent Per Unit Occupancy Rate Annual Unit Net Absorption Inventory of Rentable Units

ASKING ASKING EFFECTIVE

# OF TOTAL # ASKING EFFECTIVE EFFECTIVE NET NEW
YEAR $ SALES VOLUME RENT RENT RENT VACANCY
SALES OF UNITS RENT RENT RENT PSF ABSORP UNITS
PSF GROWTH GROWTH

2020 $1,441,032,584 111 119,778 $1,673 $1.70 1.5% $1,649 $1.68 0.9% 7.7% 2,493 5,164

2019 $1,821,119,282 112 114,614 $1,649 $1.68 2.2% $1,635 $1.66 3.2% 5.7% 2,318 1,529

2018 $1,505,868,467 104 113,085 $1,613 $1.64 2.2% $1,585 $1.61 2.3% 6.5% 3,301 2,464

2017 $1,612,225,723 84 110,621 $1,579 $1.61 3.4% $1,550 $1.58 3.0% 7.4% 2,653 3,166

2016 $2,601,933,982 110 107,455 $1,527 $1.55 1.7% $1,505 $1.53 1.1% 7.1% 1,665 3,324

2015 $1,629,649,563 104 104,131 $1,502 $1.53 6.0% $1,488 $1.52 6.4% 5.7% 2,595 2,493

2014 $728,783,406 83 101,638 $1,417 $1.44 4.0% $1,399 $1.42 3.6% 6.0% 3,294 3,623

2013 $666,927,765 60 98,015 $1,363 $1.39 2.8% $1,351 $1.37 2.9% 5.8% 2,408 1,832

2012 $792,333,904 58 96,183 $1,326 $1.35 2.9% $1,313 $1.34 2.5% 6.6% 1,371 994

2011 $431,972,203 31 95,189 $1,289 $1.31 1.7% $1,281 $1.30 1.7% 7.0% 276 44

Broward Apartments Under Construction

24
# OF EXPECTED
BUILDING CITY
UNITS COMPLETION
apartment buildings

5,928
Next Las Olas Fort Lauderdale 374 2022

Oasis Pointe Dania Beach 301 2022

totaling
units under construction The Remy Plantation 279 2021

in Broward Catalina at Miramar Miramar 300 2021

58 Oak Hollywood 47 2021

Broward Deliveries Versus Absorption

6,000

5,000

4,000

3,000

2,000

1,000

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net Absorption (Units) Deliveries (Units)

8
BROWARD MULTIFAMILY MARKET SUMMARY* CONTINUED

ASKING RENT ASKING RENT NET DELIVERED UNDER

SUBMARKET UNITS ASKING RENT VACANCY
PSF GROWTH ABSORPTION UNITS CONSTRUCTION

Coral Springs 19,099 $1,633 $1.55 2.4% 5.2% 210 211 0

Fort Lauderdale 20,424 $2,131 $2.32 -0.3% 15.4% 1,243 3,251 1,553
Hollywood/
Dania Beach
13,180 $1,422 $1.67 1.9% 6.4% 45 264 711

Miramar/
Hallandale Beach
4,450 $1,464 $1.65 2.0% 3.1% 80 9 350

Oakland Park/
Lauderhill
13,724 $1,326 $1.51 2.1% 6.6% 144 339 276

Pembroke Pines/
West Miramar
11,028 $1,870 $1.70 2.1% 8.0% 207 300 580

Plantation/Sunrise 17,029 $1,631 $1.58 1.4% 6.1% 213 330 2,113

Pompano Beach/
Deerfield Beach
13,107 $1,493 $1.60 2.8% 5.0% 268 214 345

Weston/Davie 7,737 $1,801 $1.75 -0.3% 7.6% 83 246 0

TOTAL/AVERAGE 119,778 $1,673 $1.70 1.5% 7.7% 2,493 5,164 5,928

• Broward County witnessed 46.7% of all South Florida sale activity in 2020. There were 111
apartment sales totaling $1.44 billion with an average price of $224,600 per unit or $186
per square foot. This is the highest average sale per unit year and the third highest average
price per square foot in Broward
• Despite Covid-19, sale volume activity only decreased by 21% from 2019.

• For the 12th year in a row, average asking and effective rents are at records levels.
• Asking rents increased by 1.5% to $1,673 per unit in 2020.
• Ft Lauderdale has the highest average rent of $2,131. The lowest rents is $1,326 in Oakland
Park/Lauderhill

• In 2020 vacancies increased from 5.7% to 7.7%. This is the highest vacancy levels in over ten
years. New supply outpacing absorption caused the vacancy increase.
• Highest vacancy rates is Ft Lauderdale 15.4%
• Lowest vacancy rate is Miramar/Hallandale 3.1%

• There are 24 buildings totaling 5,928 units under construction. This represents 4.9% of the
current inventory in the market.
• In the past five years, 15,647 units were delivered to the market.

• In 2020 net absorption was 2,493 units. Newly completed units totaled 5,164 units resulting
in the vacancy increase.
• Ft Lauderdale had the highest net absorption with 1,243 units, yet 3,251 units delivered – the
highest in Broward.
• No submarket witnessed negative absorption

• 6.6% unemployment rate

• In 2020 median salary income increased by 0.4%
• $363,058 median house price
• The population grew by 57,626 in the past four years, and 0.9% in 2020.

*Data as of Jan-2021, apartment sales of 10 units or more, in excess of $1MM in pricing, excluding all condo sales
Source: CoStar

9
 PALM BEACH MULTIFAMILY MARKET SUMMARY
$650M $2,250,000 $217 $170,000
2020 Sales 2020 Average Sale Price 2020 Average Sale PSF 2020 Average Sale Per Unit

$1,722 92.2% 1,304 61,480

Average Rent Per Unit Occupancy Rate Annual Unit Net Absorption Inventory of Rentable Units

ASKING ASKING EFFECTIVE

# OF TOTAL # ASKING EFFECTIVE EFFECTIVE NET NEW
YEAR $ SALES VOLUME RENT RENT RENT VACANCY
SALES OF UNITS RENT RENT RENT PSF ABSORP UNITS
PSF GROWTH GROWTH

2020 $650,286,111 39 61,480 $1,722 $1.67 1.9% $1,701 $1.65 1.1% 7.8% 1,304 2,049

2019 $835,682,945 54 59,431 $1,690 $1.64 3.9% $1,682 $1.63 5.5% 6.8% 851 1,135

2018 $1,461,767,272 69 58,296 $1,626 $1.57 2.9% $1,595 $1.54 3.4% 6.5% 2,849 1,984

2017 $1,159,087,820 46 56,312 $1,580 $1.53 2.4% $1,542 $1.49 1.3% 8.2% 1,661 2,548

2016 $1,432,657,195 50 53,764 $1,543 $1.49 2.5% $1,522 $1.47 2.3% 7.0% 1,075 931

2015 $774,870,336 44 52,833 $1,506 $1.46 5.9% $1,488 $1.44 5.7% 7.4% 949 1,633

2014 $578,421,800 40 51,200 $1,422 $1.38 4.3% $1,408 $1.36 4.3% 6.3% 1,440 1,534

2013 $401,630,872 24 49,666 $1,364 $1.32 2.9% $1,350 $1.31 2.9% 6.3% 2,566 2,311

2012 $377,015,860 20 47,355 $1,326 $1.28 3.4% $1,312 $1.27 3.0% 7.1% 923 720

2011 $272,925,706 14 46,635 $1,282 $1.24 1.7% $1,274 $1.23 1.8% 7.7% 104 0

Palm Beach Apartments Under Construction

19
# OF EXPECTED
BUILDING CITY
UNITS COMPLETION
apartment
Paradise River Walk West Palm Beach 276 2021
buildings totaling

4,984
Boca Dues Boca Raton 354 2021

units Town Lantana II Lantana 340 2021

under construction in MID Apartments Boynton Beach 230 2021

Palm Beach The Strands Delray Beach 198 2022

Palm Beach Deliveries Versus Absorption

3,000

2,500

2,000

1,500

1,000

500

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net Absorption (Units) Deliveries (Units)

10
PALM BEACH MULTIFAMILY MARKET SUMMARY* CONTINUED

ASKING RENT ASKING RENT NET DELIVERED UNDER

SUBMARKET UNITS ASKING RENT VACANCY
PSF GROWTH ABSORPTION UNITS CONSTRUCTION

Belle Glade 1,318 $650 $0.81 1.3% 33.3% -281 - 0

Boca Raton 11,320 $1,969 $1.88 -1.0% 9.0% -39 456 1,009

Boynton Beach 12,527 $1,621 $1.54 2.8% 9.5% 835 1,023 948

Delray Beach 4,513 $1,858 $1.61 0.6% 4.5% 16 - 459

Greenacres 4,806 $1,268 $1.40 3.7% 4.8% 50 - 0

Outlying
Palm Beach County
78 $568 - 0.8% - - - 0

Palm Beach Gardens/

Jupiter
7,047 $1,803 $1.60 2.8% 4.2% 45 - 136

Royal Palm Beach/

Wellington
6,729 $1,686 $1.55 2.7% 5.3% 325 - 370

West Palm Beach 13,142 $1,525 $1.58 4.2% 8.1% 353 570 2,062

TOTAL/AVERAGE 61,480 $1,722 $1.67 1.9% 7.8% 1,304 2,049 4,984

• In 2020, there were 39 apartment sales totaling $650 million with an average price of
$170,000 per unit or $217 per square foot. This is the second highest average sale per unit
in Palm Beach.
• Sale activity decreased by 22% from 2019.

• For the 12th year in a row, average asking and effective rents are at records levels.
• Asking rents increased by 1.9% to $1,722 per unit in 2020. Average rents are now higher in
Palm Beach than Broward
• Boca Raton has the highest average rent of $1,969. The lowest rents is $650 in Belle Glade

• In 2020 vacancies increased from 6.8% to 7.8%. This is the highest vacancy levels since 2017.
New supply outpacing absorption caused the vacancy increase.
• Highest vacancy rates are Belle Glade and Boynton Beach
• Lowest vacancy rate is in Palm Beach Gardens/Jupiter

• There are 4,984 units under construction This represents 8.1% of the current inventory in the
market.
• In the past five years, 8,647 units were delivered to the market.

• In 2020 net absorption was 1,304 units. Newly completed units totaled 2,049 units resulting
in the vacancy increase.
• Boynton Beach had the highest net absorption with 835 units. It also had the highest
completions with 1,023 new units. Only Belle Glade had negative net absorption.

• 5.5% unemployment rate

• In 2020 median salary income increased by 7.3%
• $385,060 median house price
• The population grew by 66,331 in the past four years, and 1.4% in 2020.
*Data as of Jan-2021, apartment sales of 10 units or more, in excess of $1MM in pricing, excluding all condo sales
Source: CoStar

11
 MARKET FUNDAMENTALS SNAPSHOT
Miami-Dade
12 MONTH 12 MONTH 12-MONTH MEDIAN
UNEMPLOYMENT MEDIAN MEDIAN HOME
YEAR POPULATION POPULATION MEDIAN SALARY HOME GROWTH
RATE INCOME VALUE
GROWTH INCREASE RATE

2021(F) 2,753,356 0.6% 8.46% $55,189 -0.5% $444,937 4.6%

2020 2,736,017 0.7% 8.27% $55,478 0.6% $425,411 9.8%
2019 2,716,940 0.1% 2.38% $55,171 3.0% $387,362 4.1%
2018 2,714,854 0.1% 3.47% $53,539 7.8% $372,264 7.0%
2017 2,713,295 0.8% 4.51% $49,669 5.4% $348,037 10.4%
2016 2,692,213 1.2% 5.25% $47,130 7.9% $315,341 5.8%

Broward
12 MONTH 12 MONTH 12-MONTH MEDIAN
UNEMPLOYMENT MEDIAN MEDIAN HOME
YEAR POPULATION POPULATION MEDIAN SALARY HOME GROWTH
RATE INCOME VALUE
GROWTH INCREASE RATE

2021(F) 1,986,081 0.8% 7.40% $61,225 -0.9% $377,082 3.9%

2020 1,970,209 0.9% 8.72% $61,758 0.4% $363,058 9.1%
2019 1,952,778 0.3% 3.04% $61,502 2.5% $332,735 2.7%
2018 1,946,107 0.6% 3.43% $60,030 6.9% $323,890 4.1%
2017 1,934,516 1.1% 3.98% $56,158 2.0% $311,112 8.0%
2016 1,912,583 1.5% 4.48% $55,055 3.1% $288,030 10.5%

Palm Beach
12 MONTH 12 MONTH 12-MONTH MEDIAN
UNEMPLOYMENT MEDIAN MEDIAN HOME
YEAR POPULATION POPULATION MEDIAN SALARY HOME GROWTH
RATE INCOME VALUE
GROWTH INCREASE RATE

2021(F) 1,535,931 1.2% 6.46% $71,522 0.1% $403,652 4.8%

2020 1,517,221 1.4% 7.75% $71,471 7.3% $385,060 9.1%
2019 1,496,770 0.9% 3.28% $66,623 3.1% $352,885 2.9%
2018 1,482,876 0.9% 3.64% $64,602 7.5% $343,009 4.3%
2017 1,470,344 1.3% 4.19% $60,074 2.4% $328,843 6.8%
2016 1,450,890 1.9% 4.67% $58,675 4.2% $308,034 9.9%
*Data reported by BLS, Moodys and Alteryx Demographics

SOUTH FLORIDA: POPULATION | HOUSEHOLDS SOUTH FLORIDA CONSTRUCTION

Growth in 2020. 0.8% | 1.5% 24,702 apartment units are currently under
Growth in past 5 years. 219,681 | 80,347
construction in SoFla. This is 7.9% of the current
apartment inventory.

Increase over next 5 yrs. 310,715 | 230,902

SOUTH FLORIDA EMPLOYMENT

SOUTH FLORIDA HOUSING
-30,024 New jobs added in past 5 years. 69.2% | 60.4% home ownership rate
8.5% Miami-Dade unemployment. in 2005 and 2020 respectively.

7.4% Broward unemployment. 41.1% | 30.9% | 31.0% median

single-family home price increase in Miami-Dade,
Broward, and Palm Beach Counties respectively
6.5% Palm Beach unemployment. since 2016.

9.1 Jobs for every apartment unit in SoFla. $413,120 median home value in So Fla.
+/-$650 difference in average monthly rent
and a mortgage on the median home value in South
SOUTH FLORIDA INCOMES Florida.
-0.4% Median salary income increase in 2020.
0.8% Rent growth in 2020.
12
 $1.86 $1,300
MKT RENT/SF AVG MKT RENT

DEBT
Miami OPTIONS
Beach, FL IN TODAY’S MARKET
925-965 MARSEILLE DRIVE, 33141
Financing markets remain robust, with lenders favoring multifamily over most other asset classes and interest rates currently
rising slightly from historic lows hit in mid-late 2020. The current macro backdrop of Fed accommodation, fiscal stimulus, and an
overall low yield environment is constructive to commercial real estate fundamentals and fuel to the CRE debt markets. Agency
interest rates remain competitive but have increased from the lows of 2020 due to Treasury yields trending up and Fannie /
Freddie’s attempt to manage multifamily origination volume through pricing in order to comply with FHFA’s 2021 mandate that
reduced purchase caps and increased percentage of mission driven affordable housing. The higher affordability requirement will
shift the emphasis away from the more expensive markets and help life companies, banks, and CMBS to take back multifamily
11
market share lost to the agencies in 2020. Fannie Mae, Freddie Mac, and HUD remain the de-facto lenders for stable Class B and
UNITS
C properties as well as those located in secondary and tertiary markets, WITH FULL LEVERAGE RATES IN THE HIGH 2% TO

1940
LOW 3% RANGE. Agencies offer FINANCING UP TO 75% OF PURCHASE PRICE where they were not cash flow constrained.
YEAR BUILTcap rates on core properties declined meaningfully in 2020, Life Companies have remained moderate in their
As transaction
outlook, using debt yield minimums to effectively reduce maximum proceeds in some cases to 50-60% of purchase price from
550
the 60-70% maximum Loan-to-Value (LTV) under program guidelines. As credit spreads grind tighter, LifeCo loan rates in the
AVG UNIT SF
very low 2% range for 50-55% LTC financing are common.
6,052
Transitional bridge financing continues to be a highly competitive space with pricing noticeably tighter in 2021 fueled by fresh
RENTABLE SF
allocations, competition for a limited number of quality loans and a healthier market for lenders seeking to lever their positions.
$2,100,000
Bridge pricing for Class A transitional multifamily assets seeking 65-75% LTC is currently 2.75-3.75%, and 3.75-4.75% for less
LISTING PRICE
stabilized / riskier profile assets in weaker markets. Such transitional deals are structured with two-to-five year terms plus
extension options and were generally interest only with limited to no prepayment penalties.
$2.09 $1,150
Interest
MKT RENT/SF Rate
AVG MKT Outlook.
RENT The floating rate outlook remains unchanged: LIBOR / SOFR should remain low for years until the Fed
starts hiking the target rate (current estimate year-end 2023). While the Fed has not announced plans for a rate increase, it is
Miami Beach,
expected
7130 RUE
FL
that
VERSAILLES, fixed base rates (U.S. Treasury yields and Swaps) will continue to rise steadily this year as the outlook improves
33141
for economic recovery and Treasury bond supply increases to fund ongoing stimulus and the new “blue” Congress’s spending
initiatives. As a result, a number of Wall Street research departments and rates desks raised their 10Y UST yield forecasts to
1.50-1.75% by year-end. So long as the rise is steady it should not have a material impact on the financing market or asset values
given the risk premium between cap rates and Treasury yields is already at record wide levels. The spread between the 2-year
and 10-year treasury yields is 132 BASIS POINTS, reflecting a steep yield curve, and offering borrowers a meaningful incentive
to prefer 5 and 7 year financing durations.

LENDER TYPE PROPERTY

LIFE COMPANY GSE (FANNIE/FREDDIE) BANK
DETAIL
Recourse Non-Recourse Non-Recourse Non-Recourse
± 0.65
ACRES Up to 75% LTV (DSCR loan constraint
Leverage Up to 70% LTV Up to 65% LTV (recourse above 65%)
currently limits to 62%- 65%)
Loan Type 28,369
±Fixed or Floating rate
TOTAL LAND SF Fixed or Floating rate Fixed or Floating rate
Term 5, 7, 10 or more years 5, 7, 10 or more years 5, 7 or 10 years
Prepayment APPROVED PROJECT
Yield Maintenance Yield maintenance / Defeasance Flexible
Lender Fees 28Par
Units Par 0.50% origination, no exit
Half to full term, depending on Half to Full term, depending on
Interest Only Multifamily,
leverage leverage
1-2 years
Townhouse, Hotel
Amortization ALLOWABLE USES
30 Years 30 years 25 to 30 years
Index
65 Res. Units |
Treasuries or Libor Treasuries or Libor Swaps
75 Hotel Rooms
ALLOWED DENSITY
1.15% to 1.50%, depending on 1.70% to 2.30%, depending on
Spread 1.50% to 2.00%
Surfside, FL
leverage leverage
8800 COLLINS AVENUE, 33154
Rate 2.15% to 3.25% 2.65% to 3.40% 2.75% to 3.40%
(i) Supplemental loan available (i) May consider additional loan
(i) Can rate lock at application. after 12 months with improvement proceeds after improvement
Comments Generally lowest cost of capital in NOI. (ii) Floating rate available, in operations. (ii) Floating rate
for new construction assets. but generally not preferred due to available, but generally not preferred
DEBT, EQUITY & STRUCTURED FINANCE increasing interest rates. due to increasing interest rates.
ROBERT
General KAPLAN
Notes:
EXECUTIVE
Life Company,MANAGING DIRECTOR
GSE, and bank loans are generally strongly preferred over CMBS by most borrowers.
+1 305 533 2860
robert.kaplan@cushwake.com
FOR MORE INFORMATION PLEASE CONTACT:
CHRIS LENTZ
SENIOR DIRECTOR
+1 305 533 2865
chris.lentz@cushwake.com

13
 CONTACT INFORMATION

CALUM WEAVER
Executive Managing Director

T 954 377 0517

M 786 443 3105
calum.weaver@cushwake.com

©2021 Cushman & Wakefield, Inc. NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IS MADE TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED
HEREIN, AND SAME IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS, CHANGE OF PRICE, RENTAL OR OTHER CONDITIONS, WITHDRAWAL WITHOUT NOTICE, AND TO ANY SPECIAL LISTING
CONDITIONS IMPOSED BY THE PROPERTY OWNER(S). AS APPLICABLE, WE MAKE NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY (OR PROPERTIES) IN QUESTION.