Q&A: A Closer Look at One of Florida’s Upcoming Urban Cores

Colliers' Mika Mattingly and Bradley Arendt discuss the factors attracting potential investors to one of the last undeveloped urban areas located between Miami and Fort Lauderdale.
(from left to right) Mika Mattingly, Bradley Arendt. Image courtesy of Colliers International
(Left to right) Mika Mattingly, Bradley Arendt. Images courtesy of Colliers International

Fort Lauderdale has seen serious population gains thanks to a healthy economy that draws investors. Lately, Dania Beach has also been attracting residents due to its proximity to downtown Miami and downtown Fort Lauderdale. “Since 2010, Dania Beach has seen its population grow by 8.1 percent, with Millennials as the largest group of new arrivals,” said Executive Managing Director Mika Mattingly of Colliers International.

In the interview below, Mattingly and Director Bradley Arendt discuss why Dania Beach is in its early stages of a major revitalization and what attracts investors to one of South Florida’s last remaining undeveloped urban cores. 

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What are the major drivers for investment in the Dania Beach multifamily market?

Mattingly: The Dania Beach multifamily market is currently waking up. The city is anchored by Fort Lauderdale’s largest economic engines—Fort Lauderdale International Airport and Port Everglades—but has remained dormant for years. Another asset of this community is its central location between two important employment hubs—downtown Miami and downtown Fort Lauderdale. As Dania Beach begins waking up and capitalizing on its strengths, more people will choose to call it home. Dania Pointe, a 2.5 million-square-foot transformational mixed-use project, is also a major driver for investment. Recently, Spirit Airlines announced that they are moving their headquarters there, which is a major win for the city.

What can you tell us about future investment trends in the region?

Arendt: In 2019, Fort Lauderdale saw a net migration increase of 19,900. That trend is forecasted to continue moving forward through 2024, at least. Future investment in the region will remain strong as more businesses are attracted to the location.

Additionally, the city recently tapped a private developer to help finance the construction of a “downtown.” This is Dania Beach’s chance to replace a run-down city government compound with a more than 6-acre, vibrant mixed-use community, transforming the city from a pass-through for travelers as they leave the airport and head south, to a destination in its own right. The project’s first phase will include four 14-story apartment buildings, each containing nine levels, for a total of 550 apartments, four levels of parking and one level of retail. This project and the city’s investment into itself will lead to an influx of developers and an increased quality of life for the residents of Dania Beach.

What are the main challenges when investing in multifamily properties in South Florida’s urban core neighborhoods? 

Mattingly: Right now, the main challenge is probably pricing. Because this is one of South Florida’s last remaining undeveloped urban cores, multifamily properties have been priced to perfection.

Tell us how the COVID-19 crisis impacted the market.

Regarding the global health crisis, honestly, it is too early to tell yet. Certainly, there will be some pain in some sectors for certain owners. We won’t know the ramifications until we open up, see who gets what bailout money, what retail tenants can reopen and which residential tenants have jobs to go back to. A lot of it is still up in the air right now.

Arendt: In the short term, there will be some pain, but in the long term, the trends and advantages that the Fort Lauderdale market had prior to the virus will still be there. The market’s long-term outlook is still very bullish in the the urban core pockets of South Florida.

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What are some of your concerns going forward?

Arendt: Which tenants and businesses never open back up, and how many? What is the total job loss count? Is it permanent or temporary? This will obviously affect occupancy rates, net operating income and overall pricing in the market. Certainly, there will be some downward pressure on pricing, but how much so is yet to be seen.

How can investors and developers overcome the challenges caused by current events?

Arendt: Right now, we are encouraging patience. We need to understand what lasting damage is done to the economy. There will certainly be some challenges for current owners, but there will also definitely be some opportunities for investors to acquire good deals. One thing we learned during the Great Recession is that property values may go down during a crisis, but once the market recovers, values shoot up.

What are your predictions for the multifamily market’s recovery?

Mattingly: In the short term, this depends on what the permanent job loss numbers are and where occupancy numbers dip to. Multifamily owners who can weather the storm will probably be just fine. Owners that can’t or are too highly levered may have to get creative and seek help from their lenders, which starts another ripple effect. However, in the long term, as mentioned before, the factors that make this a dynamic, sought-after market have not and will not change after the virus.