Fort Lauderdale’s Real Estate Market Shifts Amid High Interest Rates
Fort Lauderdale witnessed a remarkable series of multifamily real estate transactions in 2024, despite the pressures from rising interest rates. Key players in the local market have adapted their strategies, leading to significant sales across South Florida.
Cardone Capital Leads the Way
At the forefront of this year’s transactions is Cardone Capital, led by social media personality Grant Cardone. In a bold move, the company acquired three apartment properties in Broward County for a staggering total exceeding $500 million. This deal marks a notable comeback for Cardone in the South Florida real estate scene, as he had previously invested $744 million in a similar portfolio in 2021.
Details of the Major Purchase
Cardone Capital’s procurement included the Manor at Flagler Village in Fort Lauderdale, purchased for $149.5 million. This building features 382 units and was bought at a rate of $391,361 per apartment. Further expansions of Cardone’s portfolio included the Laurels at Jacaranda in Plantation and the Edge at Flagler Village, both properties adding significantly to his investments in the region.
Competition from Dermot Company
Trailing closely behind Cardone is Dermot Company, a New York-based firm that has been actively investing in South Florida since its debut in 2021. In October, Dermot acquired the Quaye at Wellington complex for $144.2 million, which breaks down to $412,000 per apartment. The complex consists of 350 units and is strategically situated on a 30.6-acre site.
Impact of Interest Rates
The backdrop of these substantial purchases is a multifamily real estate market grappling with the consequences of elevated interest rates. In 2023, despite the market activity, no single-asset sale surpassed the $200 million mark, and the highest asset transaction recorded this year was limited to $144 million—a reflection of the tightening financial landscape.
The Federal Reserve’s ongoing hikes, which included 11 increases of the benchmark rate, have made financing more expensive, limiting the buying power for many investors. Although recent rate cuts have been announced, the overall financing environment has remained challenging.
Additional Noteworthy Transactions
Other significant transactions this year included:
- Ares Management‘s acquisition of the Ceru building in Boca Raton for $139.7 million, equating to $491,858 per apartment.
- Pantzer Properties purchasing the Point at Lakeside in Doral for $139.3 million.
- KKR‘s acquisition of the Palmera complex in Doral as part of a broader portfolio purchase.
- If Church of Jesus Christ of Latter-day Saints acquired the Ellsworth building for $133 million.
A Market Resilient Despite Challenges
This cascade of transactions underscores a resilient market with players adapting to the challenges posed by high-interest rates. Companies are increasingly turning to alternative funding sources, such as federal agency loans or assuming existing mortgages, to maintain their competitive edge.
As 2024 unfolds, the South Florida multifamily market continues to evolve, showing potential for further developments and investments, illustrating the dynamics between interest rates, financing strategies, and investor activity.
Author: STAFF HERE ORLANDO WRITER
ORLANDO STAFF WRITER The ORLANDO STAFF WRITER represents the experienced team at HEREOrlando.com, your go-to source for actionable local news and information in Orlando, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Orlando International Fringe Theatre Festival, Megacon Orlando, and Central Florida Fair. Our coverage extends to key organizations like the Orlando Economic Partnership and Hispanic Chamber of Commerce Metro Orlando, plus leading businesses in leisure and hospitality that power the local economy such as Walt Disney World Resort, AdventHealth, and Universal Orlando. As part of the broader HERE network, including HEREJacksonville.com, HEREPetersburg.com, HERETallahassee.com, and HERETampa.com, we provide comprehensive, credible insights into Florida's dynamic landscape.
