Florida Apartment Demand Roars Back in 2024
Apartment demand in Florida is surging, nearly matching the state’s record-setting supply growth in recent years.
Good morning. After a brief lull in 2023, apartment demand in Florida is surging, nearly matching the state’s record-setting supply growth in recent years.
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Market Snapshot
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*Data as of 11/12/2024 market close.
Supply & Demand
Pandemic Migration Fuels Florida Apartment Demand
Florida’s apartment market is back in the fast lane—demand is surging, supply is booming, and the Sunshine State’s growth story isn’t slowing down anytime soon.
Big picture: Florida reaped the benefits from pandemic-era migration trends, with work-from-home flexibility drawing residents to urban and smaller markets. While demand hit a high in 2021, a slowdown followed in 2023 before regaining momentum this year.
Record supply: Over 77,600 units were completed statewide in the year ending Q3 2024, marking the highest annual delivery count tracked by RealPage Market Analytics. This far exceeds Florida’s five-year average of 48,700 units annually, cementing the state as a leader in apartment construction.
Hotspots: Florida is home to nine of the 30 fastest-growing apartment markets in the U.S. since 2020. Demand surged to nearly 68,000 units by Q3 2024, closing in on record supply. Hot markets like Lakeland, Cape Coral, and Sarasota saw big gains in occupancy, while college towns like Gainesville and Tallahassee lagged due to limited new builds.
➥ THE TAKEAWAY
Why it matters: Florida’s apartment market is a balanced case study, with supply growth mirroring the state’s booming population and demand. As the state’s housing market stays hot, even secondary markets are making waves in the national rankings.
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✍️ Editor’s Picks
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Park portfolio pivot: Six Flags Entertainment Corp. (FUN) is exploring ways to potentially sell underperforming parks to achieve $800M in annual cash flow by 2027.
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Move over, Cambridge: Watertown, MA has transformed into the nation’s fastest-growing life sciences hub amid rising vacancies due to recent investments and growing competition.
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Home sales forecast: NAR is predicting 6% mortgage rates later this year under a second Trump administration and hopes for an improved housing market in 2025.
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Michelin in Texas: The first-ever Michelin Texas Guide awards stars to 15 restaurants across Austin, Houston, Dallas, and San Antonio, with barbecue and high-end Mexican cuisine taking center stage.
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Changing of the guard: Saudi Arabia replaced Neom’s CEO amid mounting challenges to meet the megacity’s $1.5T vision, appointing Aiman Al-Mudaifer as acting head.
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Breaking traditions: Faced with plunging office demand and high vacancy rates, New York’s iconic real estate families are selling long-held properties once considered untouchable.
🏘️ MULTIFAMILY
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Multifamily momentum: AvalonBay Communities (AVB) acquired a 126-unit townhome complex near Austin for $49M, identifying Texas as a key expansion market.
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Zoning solutions: Texas faces an ever-worsening housing shortage, with a 320K home deficit in 2022 that impacted major metro areas like Houston and Dallas.
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Revolutionizing development: Greystar's 312-unit project in Pennsylvania will offer 1–3BR apartments, with construction times slashed by 40%.
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Swift success: Acacia Capital secured $113M in financing for the $184M purchase of a 304-unit multifamily asset in Redwood City, CA, closing in 19 days.
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Finance mavericks: Iconiq Capital secured $525M in CMBS debt to refinance a US multifamily portfolio with nearly 1.8K units across five states.
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Acquisition anticipation: S2 Capital purchased a 1985 Atlanta apartment complex from TerraCap to grow its Southern portfolio amid rising rents.
🏭 Industrial
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Airpark acquired: TA Realty, a CA-based PE firm, acquired the Chandler Airpark 202 industrial complex in Arizona for $75.6M.
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Industrial evolution: US industrial real estate demand is slightly down (-1.8%), totaling 792.2 MSF, with manufacturing facilities booming nationwide.
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Outdoor fun: Alterra IOS acquired 7 properties totaling 23 acres in mid-section US metro areas, fully leased to a telecom company.
🏬 RETAIL
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Luxury delights: RFR Holding (RFR) sold the fully leased 102 Greene Street in Soho for $46M, achieving a 4.2% cap rate amidst a broader luxury retail resurgence.
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Southern Sunrise: First Watch Restaurant Group (FWRG) acquired 16 franchised eateries in NC and SC for $49M, strengthening its East Coast presence.
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Retail Renaissance: Branch Properties and Corebridge Real Estate Investors secured a $171.4M loan to refinance eight Southeast grocery-anchored properties, which are 96.6% leased.
🏢 OFFICE
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On the clock: Manhattan is facing a major office hurdle, with 55 MSF in leases expiring by 2027. This will impact Class B/C spaces as demand shifts to Class A.
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Property predicament: Nightingale Properties loses control of the office building at 20 E. 46th St. in Manhattan, which Namdar acquired for $10.4M.
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Chicago office deals: The firm is eyeing the Chicago office tower for $60 PSF, a significant discount from 2014's $267 PSF valuation. Only 68% of the space is leased.
🏨 HOSPITALITY
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Big bets: Cities are investing billions into convention center expansions to attract lucrative events despite declining attendance, fierce competition, and uncertain economic returns.
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Hyatt Studios: The New Hyatt Studios brand will debut in January 2025 in Mobile, AL, with 4K rooms in the pipeline and 250 deals being negotiated.
📈 CHART OF THE DAY
Florida continues to top the list of US states welcoming domestic migrants, with the Sunshine State seeing the most migrants coming from MA, NJ, and NY.
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