“Day of reckoning”: South Florida multifamily Investors feel sting of rising interest rates, insurance
“South Florida’s demand and rent dynamic are the best in the country, period,” said David Lynd, CEO of apartments developer and investor The Lynd Group. “But that has nothing to do with interest rates, insurance rates and costs. There’s no hiding from them anywhere, no matter what market you are in.”
Compounding the problems are inflation, which has prompted rent delinquencies, and a hefty development pipeline that’s slightly tempered demand, prompted concessions and led rents to plateau or slightly decline in some submarkets, according to experts.
“We definitely saw that groups that purchased in 2021 and 2022 are having this sort of day of reckoning right now,” said Alex Horn of Miami-based lender BridgeInvest. “They bought at low cap rates with the projection of ever-increasing rents, and all of the sudden that has flipped.”
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