Sarasota Multifamily Market Report
Market Overview
Sarasota, FL, is a picturesque city on the state’s southwestern coast and a popular destination for tourists and residents. As of Q3 2023, the key factors in the multifamily sector have weakened, marked by an increase in vacancy rates, decreased demand from renters, and declining rental rates. These changing market conditions, along with the uncertainty of interest rates and economic challenges, have led to reduced investment activity in recent quarters, in contrast to the higher levels seen in Q2 of 2022.
Highlights
- In the southwest Florida region, Sarasota is at the forefront of rent reductions, experiencing a year-over-year (YOY) decrease of 3.1% in asking rents.
- In the last 12 months, approximately 1,400 multifamily units have been absorbed, with 4,000 units delivered.
- Out of Sarasota’s 10 submarkets, seven are currently experiencing a decline in asking rents compared to the previous year. The Lakewood Ranch Development submarket is the most significantly affected, which has seen a reduction of approximately 9.0% compared to the same period last year.
Rents | Vacancy | Construction
Increasing vacancies resulting from a surge in new construction have compelled landlords throughout the area to lower their rental rates. Sarasota’s average asking rent has declined by 3.1% over the past year. Sarasota’s multifamily vacancy has risen by more than 500 basis points YOY, reaching 11.4% in Q3 2023. This vacancy rate is anticipated to continue to increase, especially with the addition of 6,000 units expected to be completed in the upcoming quarters, expanding the inventory by 15%.
The primary catalyst for growth in the Sarasota multifamily market has been constructing new multifamily properties. Approximately 12,000 units, equivalent to 30% of the market’s total inventory, have been completed within the past five years.
Sales
About $719 million in transactions have occurred in Sarasota’s multifamily market in the last 12 months. While this amount is lower than the record levels observed in 2021, it significantly exceeds the levels seen before the pandemic.
The most substantial transaction this year involved Chicago-based DWS Group acquiring two Class A properties along Lakefront Drive for a total of $135 million.
Sarasota by the Numbers Last 12 Months
Source: CoStar Group
- Vacancy Rate: 11.4%
- Asking Rent Growth: -3.1%
- Delivered Units: 4,028
- Sales Volume: $719M
