MARKET SNAPSHOT: New Construction Expected in Miami as Vacancies Fall and Employment Prospects Loom
By Philip Shea, Associate Editor
The Miami-Dade area is set to see significant multifamily development in 2012, as the local economy expands and vacancies trend downward. Perhaps the year’s most consequential development, however, has already taken place—as the state legislature recently turned down a bill that would have permitted the construction of two casinos in the county. While controversial, the measure would have added a number of jobs in the construction and hospitality sectors.
The Miami Herald reports that while the proposal failed in the legislature, a political committee under the name “New Jobs and Revenues for Florida” has been launched with the aim of securing a statewide constitutional initiative to place before voters in 2014. Meanwhile, a group called “No Casinos,” which helped defeat the bill and is backed by Disney and auto magnate Norman Braman, says it is ready to oppose the potential ballot measure.
In the meantime, however, a sizeable buyer pool with investors from Europe and Latin America will likely favor a turnaround of many distressed properties, as well as bolster certain primary properties near beaches like Coconut Grove, Coral Gables and Kendall. Marcus & Millichap expects asking rents to go up 3.6 percent in 2012 to $1,124 per month, while effective rents should advance 4.2 percent to $1,081 per month, representing rent growth the region has not seen in years.
Furthermore, job gains will increase by 3 percent this year, up from 20,000 in 2011 to 20,600 in 2012. Marcus & Millichaps notes that such growth is being bolstered by strong international trade. Even with such positive employment indicators at the local level, however, Florida’s overall unemployment rate currently stands at 9.4 percent—1.2 percentage points higher than the rest of the nation.
Yet with rents increasing and more jobs forecast, it is estimated the nearly 1,300 new rental units will be completed in 2012, up dramatically from 300 units in 2011. Additionally, the city has moved up one place to as number 20 on Marcus & Millichaps National Apartment Index (NAI) for 2012.
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