In the mentioned submarkets, new construction for multifamily residential is very quiet.  Demand is way up and based on the occupancy rates, supply is very limited.  It will only get worse for new tenants making the transition from homeownership.  In SW Florida, if only 1% of current owner-occupied dwellings sell, short sale, foreclose, there will be an additional surge in demand by at least 6,000 units.  In Lee County, Florida, there are less than 500 units under construction at the present time.

Effective Rents are expected to improve 3.1% from Q1 2011 to Q3 2011.  This is a very significant improvement in only 9 months.

MultiFamily Investor confidence is improving drastically.  It most certainly seems like the bottom of the market and most investors including a REIT out of New York that we have spoken with expect values of apartment complex assets in Florida to increase 6% in 2011.

According to Marcus Millichap, in SW Florida, there was a total of approximately $360MM in major apartment sales, which exceeds 2009 by 387%.  Of that, $113MM of it was sold during Q4 2010.

Investors of apartment complexes also must realize what assets are currently trading for in Florida.  Below are average Capitalization Rates on what the market is currently trading at:

• A Class – 4.5% – 6.0%
• B Class – 6% – 7.5%
• C Class – 8% – 10%

If your offer does not meet these Capitalization Rates, chances are you will be beaten out by competition in the market.  Although we have exclusive First Right of Refusal asset deals with Florida institutions, the sellers know what the market is trading at.  Our advantage is that we do not have to enter into a bidding war.

If you have any questions regarding apartment complex investing in Florida, please call Scott Allan at (877) 688-7582 or e-mail here.

Updated on 1/6/11

Current Off-Market offering is a Fractured Condominium Complex in TAMPA, FLORIDA.  Below are the details.  Call Scott @ (239) 278-0028 for additional details.

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126 Units out of 168 for sale

• New A/C’s in 85% of units and new appliances in 75% of all units.
• No Cap X is likely going to be required.
• Call for more details.

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UPDATE:  Orlando complex has been placed under contract.

Current Offering:  205 Unit Apartment Complex:  Jacksonville, FL.  Value Add complex and an opportunity for an investor to reposition the asset to increase revenues.  Current rental rates work well.  Current occupancy 72% located on the intercoastal of Jacksonville.  Almost half of the 205 units have direct water views.  Contact us for additional details.

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Due to the privacy request of this property, we cannot disclose a whole lot here.  This complex is not listed publicly.  We are working out the final details to make this property available to a real estate investor looking to purchase a huge Upside complex. Price is $3 million from the lender.

It is 340 total units.  Currently 15% Occupied due to nearly 3 years of neglect.  Capital Improvements are needed in the amount of approximately $2.5 million.  This budget was created with a contractor and would include a full cosmetic update. Great location.  On-site property management, 2 pools, kids play area.  Sits on 18.3 acres.  Original note in the amount of $17.3 million.

After Cap X, the total price per door would be about $16,000.  This is almost 35% less than competetive recent sales.  The current Net Operating Income nearly covers current expenses.  Most of the capital improvements can be paid by income.   Area is very dense and is supportive by numerous similar complexes very close to Mall of Millenia.  Area’s occupancy rate is 93%.

Limited Due Diligence is offered and lender is selling “As-Is”.  We have due diligence folder including receiver reports, comp map, and financials.  Contact Us for additional information.

Over the last 4 weeks, we have looked at 3 complexes in Naples and Ft. Myers.  Two of the three are completely stabilized properties and cash flow very well, depending on the price you buy it at.  The coincidence is that 2 of these complexes are distressed sales.  Investors of this type of property most likely have other properties.  As some investors look to eliminate debt, they short sell or give up their other properties.  If the note on the complex we are looking at is close to loan maturity, we know we have a distressed property on our hands, because chances are, no matter what type of cash flow it throws you, the current owner will not be able to refinance the loan due to his other real estate in the crapper.

Some analysts say that we should expect upward of over 8 million foreclosures this year in the United States.  I myself am gearing up to purchase multi family properties and I also will also be selling quite a bit to interested investors. 

The fact of the matter is that everyone is now realizing that there is a direct and obvious correlation between foreclosures and the multi-family market.  Due to the staggering number of foreclosures, this in fact bodes well for multi-family:

• Millions of former homeowners are becoming tenants.
• Rental rates have stabilized in declining markets.
• Due to a larger ratio of homeowner/tenant use, rental rates have in fact increased in certain markets.
• Vacancy rates have significantly dropped.

Basically, the multi-family real estate market is improving and benefitting from the downturn of the general market.  It is expected that real estate investors of multi-family will reap huge gains.  Taking advantage of low acquisition prices and having higher rental performance is something that is positive in the Fort Myers real estate market at the moment.  Ft. Myers provides a great opportunity in a recovering marketplace.

About a mile away from our office there is a 210 unit apartment complex.  The average occupancy rate over the last 5 years I was told was 80%.  Today, they have a 97% occupancy rate which qualifies for “full occupancy.”

If you are a real estate investor and are looking for multi-family investment, such as apartment complex, now is the time.  We can assist in finding complexes with very reasonable terms, prices, and great capitalization rates.