via Sun Sentinel Paul Owers
Apartment rents in South Florida are rising at a faster rate than many of the nation’s largest metro areas.
Palm Beach County rents grew 5.3 percent in the third quarter from a year ago, according to MPF Research in Carrollton, Texas. That ranks ninth among the 50 largest metros.
Broward County saw a 4.4 percent increase year to year, ranking 13th nationwide.
Oakland, Calif., led the country with growth of 9.1 percent. Denver and San Jose, Calif., tied for second at 9 percent. The national average is 3.7 percent.
The housing bust fueled a resurgence in the apartment sector, with former homeowners turning to rentals in large numbers. A lack of existing supply quickly led to a landlord’s market that still remains in place.
While the ongoing housing recovery will slow demand for rentals, millennials and others who prefer to remain mobile will keep the apartment market robust, said Jay Parsons, director of analytics & forecasts with MPF.
“It’s certainly not going to knock it off a cliff,” he said Wednesday.
Palm Beach County’s average rent at the end of the third quarter was $1,281 a month, according to MPF. Broward’s average rent was $1,301.
To satisfy demand, developers are building thousands of apartments across Palm Beach and Broward counties. Many of them are luxury units, which are contributing to the region’s steady rent growth.
Palm Beach Gardens-based Ram Real Estate is close to completing two downtown projects: Alexander Lofts in West Palm Beach and The Mark at Cityscape in Boca Raton. Both are expected to open early next year.
The 85-unit Alexander Lofts will occupy a former Southern Bell headquarters at Fern Street and South Dixie Highway in West Palm Beach. The studio, one- and two-bedroom units are priced from $1,200 to $1,750 a month.
The 208-unit Mark project is at the southeast corner of Federal Highway and Palmetto Park Road. The studio, one-, two- and three-bedroom units range from $1,400 to about $3,000 a month. Four penthouses will fetch more than $5,000 a month.
“We feel like there’s a lot of pent-up demand for apartments in the downtown,” said Hugo Pacanins, Ram’s managing director of multifamily development. “People are interested in a more urban lifestyle, and there really wasn’t anything [new] to offer them.”
In Broward, the Stiles real estate firm broke ground this year on a 254-unit apartment building at 215 SE 8th Ave., a block north of Las Olas Boulevard. Meanwhile, The Related Group of Florida recently completed the 249-unit New River Yacht Club in downtown Fort Lauderdale, with rents ranging from $1,600 to more than $4,500 a month.
Miami-based Related also said it will start construction this month or next on Icon Las Olas. The long-delayed project was expected to be condos, but Related plans to make it high-end rentals, at least for now.
“We’re seeing the market respond with a willingness to pay very, very strong rent for a quality product,” said Joseph Thomas, a vice president for the Marcus & Millichap firm in Fort Lauderdale.
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