Consistent Growth Seen Across South Florida in Q2, by Colliers International
Colliers International reported consistent growth across the entire South Florida market in every asset class in its recently released “South Florida Commercial Real Estate Review Q2 2013.” The company is confident that the market will continue to improve over the next several quarters. It noted that some in the market remain cautious and hesitant to label what has taken place a complete recovery, but it sees “a widespread turn for the better.”
What Colliers found exciting is that more than 30 residential towers are now under construction, part of about 150 planned projects across the tri-county (Miami-Dade, Broward and Palm Beach) South Florida market. The report noted: “Investment sales volume is up +25 percent from this time last year. … New CMBS offerings are up a whopping +240 percent from this time last year and, if you couldn’t already tell, real estate remains the reigning champ for delivering long-term investment returns (2.5 percent better annually than the next asset class).
“The market went from chasing its tail, to chasing any deal to where we are now, chasing the next deal. Aside from the ‘all is well’ response from the sales community, the leasing market is telling a similar story. The pendulum has swung for virtually every product type across every major submarket. Many landlords are no longer shoring up their assets like they’re trying to weather the next great storm. Rental rates are seeing year-over-year growth and concessions are getting less generous, if available at all. Developers are putting shovels in the ground again for speculative product.”
The nagging question in this marketplace — as in others around the country — relates to interest rates and capital markets in general. Colliers noted that the jump in the 10-year treasury of more than a full percentage point since the beginning of 2013 has some in the market predicting that higher interest rates will put a brake on growth. The report added, however, that the South Florida market continues to see more dollars chasing fewer deals.
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