South Florida’s Commercial Property Market Among Highest in the Nation
Posted By Victoria Boss Vero Beach Realtor || 4-Sep-2014
The commercial real estate industry in the U.S. is experiencing rapid improvements, especially in South Florida.
The delinquency rates have dropped a considerable extent as well. In June 2013, the delinquency rates were observed to be 8.65 percent, which dropped down to 6.05 percent in June this year. The rate of seriously delinquent loans reduced from 8.37 percent to 5.92 percent over the same period.
The Mortgage Bankers Association’s 2014 news release also declared the reduction in delinquency rates over years. The reduction in rates was observed in other property types including: lodging, by 4.04 percent; retail, by 1.65 percent; multifamily, by 2.3 percent; and industrial, by 3.33 percent.
According to the South Florida Business Journal, commercial mortgage-backed securities (CMBS) and serious delinquency rates have dropped since 2012 in South Florida. Overall prices have increased this year when compared to the same time in 2013. The biggest increases were observed in multifamily units, with a rise of 15.9 percent; office 14.7 percent; industrial 11.8 percent; retail 1.4 percent. Rent prices have increased as well, showing a rise of 0.7 percent in office space; industrial 6.3 percent; retail 3.7 percent.
The improving commercial real estate market is evident by the sales volume of Miami’s industrial market, amounting to $252 million. According to State Street Realty president George Pino, many institutional investors are interested in making capital investments in Miami. Many New York investors are playing an active role in the commercial real estate market in and around Miami.
The demand for homes is increasing and with the initiation of new construction, land availability will diminish. Miami has also developed as a superlative hotel destination. A survey of customers found that most were ready to shell out $1,000 per night, which has resulted in an occupancy rate of more than 80 percent. Many boutique hotel properties were sold at $1 million per room or above. Miami has also shown increases in employment rates. Moreover, the housing market is improving with an increase in the multifamily sector of about 76.2 percent from the previous year. All these factors have contributed to the overall recovery and development of the region.