America's Property Tax Advisor

South Florida Apartment Sales Break Records

BY TONY GARCIA, FORT LAUDERDALE, MARCH 2022

Investors spent $11.4 billion on South Florida multifamily properties last year, and 2022 could be another banner year.

 

Out-of-state private capital investors bought 603 rental properties in Miami-Dade, Broward, and Palm Beach counties – more than double the previous annual record of $5.5 billion set in 2016, according to a report from Cushman & Wakefield. All three counties also broke records for average price per apartment.

 

“South Florida multifamily is arguably the hottest commercial real estate market in the U.S.” the report states. “Fundamentals are bullish, and investors and renters continue to come to the region.”

 

Rising sales prices and escalating rents will lead to higher assessments and property taxes in 2022 and 2023.

 

Miami-Dade County

 

Last year, buyers spent an average of $278,342 per unit in Miami-Dade, where rents increased 19.7% year-over-year. A renter will pay an average of $1,997 a month in Miami-Dade.

 

Class B and Class C apartment buildings accounted for 78% of Miami-Dade’s sales activity last year. Vacancies fell from 6.6% in 2020 to 3.2% in 2021, according to the report.

 

Broward County

 

The average price paid per unit in Broward was $281,163. Rents spiked by 23.3%, with renters paying an average of $2,073 a month.

 

Class A properties accounted for nearly 50% of apartment building sales in Broward. The vacancy rate tumbled from 7.4% in 2020 to 3.2% in 2021.

 

Palm Beach County

 

Investors paid an average of $292,221 per unit in Palm Beach County, which had the biggest single-year rent increase ever recorded in South Florida at 32.1%. Renters paid an average of $2,280 a month last year.

 

Class A and Class B properties represented 92% of all sales in 2021 in Palm Beach. The vacancy rate dropped from 7.9% in 202 to 4.1% last year.

 

Holding the Line on Taxes

 

Record sales prices and rising rents will be represented in the 2022 proposed assessed values that will be issued by all Florida counties in August.

 

There is a short time period to appeal overstated values. The appeal deadlines will fall 25 days after the notices are mailed.

 

Multifamily property owners must act early to do their due diligence and avoid paying more than their fair share of taxes. Decisions for tax appeal representation should be made as soon as possible.