Developers in South Florida are increasingly listing multifamily development sites for sale, a shift attributed to changing market conditions and economic pressures. Evolve Companies, which had planned a 141-unit apartment building in Miami’s Wynwood Norte neighborhood, recently put its six-lot assemblage on the market for $14 million instead of starting construction.
Experts note that this trend is not isolated. Tony Arellano, a broker involved in several of these listings, said, “I don’t think it’s a secret that the market cycle for new construction multifamily is ending. Interest rates are higher, development costs are higher, concessions [to apartment tenants] are higher.”
The South Florida region saw significant growth in multifamily housing following the pandemic due to increased demand and record rent growth from newcomers. However, over the past two years, inflation and elevated interest rates have raised construction costs while an abundance of new projects has led to lower rents.
Sebastian Faerman, another broker active in the market, observed: “All the big developers and players tell us [that] if it wasn’t shovels in the ground by a couple of months ago or last year, they are not going vertical.” He added that some sellers are motivated by business models focused on buying and flipping entitled land rather than being forced out by rising costs.
The Live Local Act has also influenced activity. The state law allows larger projects if at least 40 percent of units are designated as below-market rentals. Some investors use these expanded entitlements to increase site value before selling.
Miguel Pinto of Apex Capital Realty pointed out that many developers face financial strain from owning non-income-producing land with ongoing property taxes and loans coming due. “Some of these guys bought at the top of the market. They were overleveraged, and they thought everything was going to keep being peachy, that the rents would be peachy, that with Trump being in power, interest rates would have dropped,” he said. “None of that has happened.”
Even properties not publicly listed may still be available for purchase. Pinto noted: “If it’s not publicly for sale, it’s still for sale… Everyone is a net seller right now. All it takes is one call to their office.”
Clara Homes recently listed its Wynwood site after more than a year developing plans for a 147-unit tower. James Curnin, founder of Clara Homes, explained his decision: “I just want to move to bigger and better things,” citing both high inventory in Wynwood and delays in site plan approvals.
According to CoStar Group data reported by Juan Arias, director of market analytics for South Florida at CoStar Group (https://www.costar.com/), South Florida completed a record 18,600 apartments last year—more than net new leases signed—and completions were concentrated among high-end rentals in urban areas like Wynwood.
As supply has grown faster than demand, average rents have fallen or remained flat across various unit sizes in Wynwood over the past year according to Zumper (https://www.zumper.com/).
Evolve Companies paid about $18.8 million for two sites in Wynwood Norte but later listed them after securing city approvals. George Belesis of Dwntwn said Evolve lacked local presence: “They don’t really have boots on the ground in Miami… We have solidified for them a great [joint venture] partner” for one project.
Other firms such as K2 Capital Group are testing market interest or seeking partners rather than pursuing immediate construction starts on their sites.
Some developers unable to switch from apartments to condos because their sites aren’t suitable are seeking equity infusions amid tight investor appetite due to high interest rates. Pinto remarked: “When you have rates so high… why would you take a risk with a developer? For multifamily it’s very very hard.”
Broker Chris Lentz offered an alternative view: current listings signal renewed activity as banks return to lending and loan spreads narrow. He cited CME Group’s forecast (https://www.cmegroup.com/) showing high probability of an upcoming Federal Reserve rate cut.
“If anything we are actually starting to see higher transaction velocity,” Lentz said.
A recent major transaction saw Swire Properties sell a development site proposed for condos and hotel rooms to Kerzner International for $45 million—a notable exception amid mostly smaller or less prime parcels coming up for sale.
Pinto concluded: “They bought [land], thought they would build it,[and] the world turned on them… As the old saying goes ‘When the tide goes out we see who is swimming naked.’”
