Rental, sweet rental: Shift toward apartment living spurs new construction

Since the housing meltdown, more South Floridians are renting a place to live because the financial reality is that they cant buy.

A lot of other people simply prefer to rent.

The two groups are spawning a fundamental shift in housing and a fledgling boom in the construction of new apartments for the first time in years. It is a national trend that is crystallizing in South Florida with rental apartment projects in the works in cities ranging from Plantation and Davie to Doral and Coral Gables.

Rentals will be in demand for a while. The pendulum has swung, said Mahesh Pattabhiraman, chief lending officer for Miami-based Apollo Bank, which this month made a land-acquisition loan to Miamis Adler Group, a major commercial developer that plans to build two 20-story rental apartment towers near the west end of 79th Street Causeway in a joint venture with ECI Group of Atlanta.

A lot of people with bad credit wont qualify to buy a home. And because of the crisis, some people are not convinced its the right time to buy, added Pattabhiraman.

Like Adler, other major South Florida developers with specialties in areas such as luxury condominiums and industrial parks are refocusing on rental apartments to capitalize on the strong demand and the availability of financing.

Everybody is jumping on the bandwagon, said Armando Codina, a prominent Miami developer of industrial parks and commercial projects who has turned his attention in a big way to rental apartments, with projects in various stages from Doral to Davie. The fundamentals are right. This is not a trendy thing, said Codina.

On Wednesday, Codina announced his Coral Gables-based CC Residential has formed a partnership with AREA Property Partners, a New York real estate investment giant, to develop rental apartment projects in South Florida. The alliance includes two projects in which Codina has already broken ground: a 352-unit project renamed The Signature at Doral, at Doral Boulevard (NW 41st Street) and the Homestead Extension of Floridas Turnpike, and a 350-apartment project on Davie Road between SW 29th Street and SW 31st Street, renamed The Signature at Davie.

AREAs CEO for North America, Richard Mack, said his firms recent success in acquiring a troubled condo project and turning it into an apartment complex on the Miami River called Terrazas River Park Village reinforced his view that the time is right for multifamily rental development. It led us to conclude that rents are going to continue to rise and demand is going to continue to rise in a way to sustain new development, Mack said.

Fueling the demand is the dearth of professionally managed apartment buildings in the wake of the condo-conversion mania of the last decade. Many multifamily rental apartments in the region were snapped up by developers, converted into condos and sold for quick profits.

See the original post here:
Rental, sweet rental: Shift toward apartment living spurs new construction