Fort Lauderdale, FL Multifamily Market Report

Market Overview

A record-breaking number of new apartments was built in 2022 in Fort Lauderdale, with 70 percent of starts set to be delivered in 2023. Most of these new apartments set to deliver throughout 2023 will target higher-income residents and those who cannot afford to buy single-family homes. Compared to 2022, there has been a noticeable decrease in the number of new construction projects in the early months of 2023. Consequently, the overall vacancy rate for apartments will remain lower than the national average for the next five years.

Highlights

• Fort Lauderdale currently has the fourth-highest number of apartments in its inventory pipeline among all the metro areas in Florida, following Miami, Orlando, and Tampa.
• Even though there is significant investor interest, the combination of uncertainty around cap rates, increasing interest rates, and a slowing economy will continue to harm transaction volume in the upcoming quarters.
• Fort Lauderdale’s multifamily vacancy rate is the fifth lowest in the state, and rent increases continue to outperform similar-sized markets.
• Due to the area’s focus on higher-income employment sectors and a relatively small number of new properties being added, Fort Lauderdale is expected to experience more significant rent increases than Miami across all property ratings until 2024.

Rents | Vacancy | Construction

Currently, there are over 12,500 units under construction.

The 12-month asking rent growth has slowed to 1.3 percent, significantly below the historical average of 6.7 percent. Despite notable increases in 2021 and 2022, the recent slowdown is evident, particularly in the higher-rated 4- and 5-Star segment. However, rent gains for 3-Star units and 1- and 2-Star units have been more positive. Studio and one-bedroom units are expected to face challenges in rent growth due to increased supply in the coming years. The vacancy rate is currently 5.9 percent and is expected to rise in the next year as the supply pipeline remains elevated and volatile economic headwinds continue to affect multifamily demand. Despite predicted vacancy increases, Fort Lauderdale will likely maintain tighter vacancies than other Florida metros, such as Tampa, Orlando, Jacksonville, and Palm Beach.

Though there was a slight slowdown in construction activity in Q1 2023, Fort Lauderdale continues to have a robust development pipeline. Most of the units under construction, about 78 percent, are luxury 4- and 5-Star apartments. Most construction is concentrated in the area between I-95 and the Atlantic Ocean, particularly in Central Fort Lauderdale, Hollywood/Dania Beach, and Pompano Beach/Deerfield Beach. Around 30 percent of the luxury units are located near Las Olas Boulevard, known for its shopping, dining, and entertainment options. Developers are focusing on areas with ample amenities, including beach access and newly updated retail establishments, following national trends.

Sales

Sales activity has started to decrease, with a total volume of over $176 million in Q1 2023, marking the lowest level since the first quarter of 2017. Currently, the 12-month sales volume stands at $2.2 billion. Due to the quick rise in prices, a slowing economy, and higher interest rates, transaction activity is anticipated to be less active in 2023.

Fort Lauderdale by the Numbers Past 12 Months

• Delivered Units: 3,440
• Absorption Units: 1,656
• Vacancy Rate: 5.9%
• Asking rent Growth: 1.3%
• Average Price Per Unit: $285,000
• Sales Volume: $2.2B
• Sale Comparables: 196