A developer planned to complete a 141-unit apartment building in Miami’s Wynwood Norte neighborhood last year.
The project was first revealed in the fall of 2022. Yet, instead of starting construction, Evolve Companies listed the six-lot assemblage for sale this spring, asking $14 million.
Across South Florida, developers who planned multifamily buildings in recent years are now quietly putting the sites up for sale, according to online listings and experts.
“I don’t think it’s a secret that the market cycle for new construction multifamily is ending,” said broker Tony Arellano. “Interest rates are higher, development costs are higher, concessions [to apartment tenants] are higher.”
The uptick in listings comes as the tri-county region’s market turned. Multifamily boomed in the three years after the pandemic started, fueled by an influx of out-of-staters that created unprecedented demand and record rent growth. Developers seized on the bonanza by quickly completing new projects. But in the past two years, inflation and elevated interest rates have made construction more expensive, and the development flurry created a supply overhang, lowering rents. The Trump administration’s tariff and immigration policies threw more uncertainty into the market.
For many developers, the risks are too high and returns too low to build apartments, experts said.
“All the big developers and players tell us [that] if it wasn’t shovels in the ground by a couple of months ago or last year, they are not going vertical,” said broker Sebastian Faerman.
But, he cautioned, not everyone is selling multifamily sites because they are priced out of construction. Some are “land guys,” whose business model is to purchase, entitle and flip properties. Others are Live Local Act investors who are using the state law to supersize development entitlements and now want to flip the sites for a profit. The two-year-old state law allows for bigger projects as long as 40 percent of units in the new buildings are below-market rentals.
It isn’t clear how many sellers marketing multifamily development sites are feeling the sting from higher construction costs and interest rates. Developers interviewed for this story cited various reasons for listing their properties, vehemently denying it’s because of costs or expected lower returns.
“Developers can’t tell you, ‘We are hurting … we need to get a buyer.’” said broker Miguel Pinto.
“Some of these guys bought at the top of the market. They were overleveraged, and they thought everything was going to keep being peachy, that the rents would be peachy, that with Trump being in power, interest rates would have dropped,” he said. “None of that has happened.”
The pain is widespread, and a crop of developers are in a bind, said Pinto, of Apex Capital Realty. They own land that is not producing income and is costing them in property tax bills, and is financed with loans with looming maturities, he added.
Even those not listing their sites on the market, will consider an offer. “If it’s not publicly for sale, it’s still for sale,” Pinto said. “Everyone is a net seller right now. All it takes is one call to their office.”
Too much in Wynwood
Clara Homes’ 147-unit planned apartment tower in Wynwood isn’t going exactly as intended.
For more than a year, the Miami-based firm worked on the proposal, paying $7.7 million for the nearly half-acre site, scoring approval from a city design review board and publicizing the 22-story Clara Wynwood project.
Last month, Clara Homes listed the site for $10.9 million.
“Pre-Covid, there were two vertical buildings in Wynwood. Post-Covid, there were 36,” Arellano, who is marketing the site, said. “So we have provided a tremendous supply of market-rate rentals.”
A record 18,600 apartments were completed last year in South Florida, outpacing 15,000 net new leases signed, CoStar Group data shows. That followed 15,300 units completed in 2023; 11,200 in 2022, and 10,700 in 2021.
The hefty completions were mostly of high-end market-rate rentals in urban cores, including Wynwood, according to CoStar’s Juan Arias, director of market analytics for South Florida.
As a result, rents are no longer rising. The average monthly rent for a one-bedroom apartment in Wynwood is $3,049 this month, down 2 percent from last month, and down 7 percent from last year, according to Zumper. A two-bedroom is $4,500, flat compared to last month, and a 2 percent drop from last year. A three-bedroom is $5,722, down 1 percent from last month, and flat, year-over-year, Zumper data shows.
James Curnin, founder of Clara Homes, conceded Wynwood has high inventory. But he said that’s not why he listed the Clara Wynwood site. If the firm builds the project, the supply will be absorbed by the time the tower is completed, he said.
“I just want to move to bigger and better things,” said Curnin, who also cited issues with a protracted site plan approval process.
Evolve Companies, based in Greensboro and Wilmington, North Carolina, paid roughly $18.8 million in two deals for a pair of multifamily development sites in Miami’s Wynwood Norte area in 2022, marking the firm’s South Florida debut. It hired architect Kobi Karp and submitted proposals for a pair of buildings along Northwest Fifth Avenue. In March, Evolve scored approval for the first eight-story, 141-unit building.
A month later, Evolve listed the roughly 1-acre site on the market for $14 million, as well as the 0.7-acre property for its second project, a planned 11-story building with 105 units, for $12 million.
Evolve’s forte is garden-style apartment complexes in states elsewhere in the Southeast, brokers marketing the site said.
“They don’t really have boots on the ground in Miami, and they are more based in North Carolina. We have solidified for them a great [joint venture] partner” for the 141-unit project, said George Belesis, of Dwntwn, who is marketing the sites.
The firm may pursue the 105-unit project or may turn it into a Live Local Act project, added Dwntwn’s Wilson Alers, who is also marketing the properties.
Evolve, led by Mike Winstead Jr. and Joe McKinney, didn’t return requests for comment.
Curnin’s Clara Wynwood site also could secure a partner through marketing, or he may lease the one-story, 11,400-square-foot building. The Austin Burke menswear retailer that had occupied the property for decades closed this year.
Dwntwn’s Devlin Marinoff, who also is marketing Curnin’s site, noted that the market is currently in a multifamily absorption cycle. “It’s the ordinary lifecycle of real estate,” he said.
Out with the “less tested”
During the multifamily boom, developers homed in on south Miami-Dade County, an area with an ample supply of discounted buildable land. They filed a flurry of project proposals.
Now, many of their sites have popped up for sale.
Developers with projects in urban cores who expanded to south Miami-Dade are getting stretched too thin with pending plans and are more likely to let go of their south county sites, said Faerman, of FA Commercial.
“If it’s in [Miami’s] Edgewater or Wynwood, they are still going to go vertical,” he said. But in “less tested” south Miami-Dade, “there’s less [comparables] to look at to see what is actually achievable” for rents.
K2 Capital Group, led by Mariano Karner and Esteban Koffsmon, paid $4 million last year for a 2.6-acre site in Goulds. The firm proposed an eight-story, 206-unit apartment project in May. The land, which allows up to 12 stories and 320 units, is now on the market, with an asking price of about $6.3 million, according to Faerman, the listing broker.
“If someone wants to pay a premium, I would consider selling,” Koffsmon said, adding the listing is more of a market “test” and a potential path to finding a partner for K2 Capital’s growing development pipeline.
Elsewhere in Miami-Dade, some multifamily developers have dealt with higher costs and less demand by switching their apartment projects to condos.
The problem? Not every multifamily site works for condos, Pinto said. Those who couldn’t do a condo conversion are now looking for an equity infusion to help start their projects, and finding slim pickings.
“When you have rates so high, you can put risk-free money in bonds or the money market at 5 [percent] or 6 percent. So why would you take a risk with a developer,” Pinto said. “One thing is you buying the property with investors, another is getting money from investors to start building right now. For multifamily, it’s very, very hard.”
Tide coming in?
The uptick in listings of development sites is a sign the market’s picking up — not that it’s slowing, said broker Chris Lentz.
Economic tailwinds are in store: Banks are reentering capital markets, loan spreads are narrowing and construction costs are decreasing, he said. The fear of tariffs has been abated because the “impact to costs was not as significant as anticipated,” and interest rates fell slightly, with bigger cuts expected, Lentz added. He cited Chicago-based financial services firm CME Group’s prediction of a 94 percent probability of a 25 basis point rate cut at the Fed’s meeting next month.
“If anything, we are actually starting to see higher transaction velocity, and that may be why people may want to test the market again,” said Lentz of Cushman & Wakefield.
This month, Swire Properties sold a nearly 1-acre development site proposed for 350 condos and 180 hotel keys to Dubai-based hospitality firm Kerzner International for $45 million.
“We are seeing renewed activity with more capitalizations of developments and more acquisitions of sites,” Lentz said.
Sites like Swire’s are exceptions, Pinto countered. It’s “the guys that bought B and C sites” that are trying to sell now, he said.
He also expects an interest rate reprieve, which could come when Jerome Powell’s term as the Fed’s chair ends next spring. Until then, it won’t be easy for overleveraged developers that are priced out of construction.
“They bought [land], thought they would build it, [and] the world turned on them,” Pinto said. “Things will shake out, and that’s when we will know who had a backup plan and the financial wherewithal.… As the old saying goes, ‘When the tide goes out, we see who is swimming naked.’”
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