Ft. Lauderdale has earned the nickname Venice of America, but it’s not just the 23 miles of beaches within the city’s 36 square miles that caught our attention when it broke into the top 20 of our Best Places to Invest Report earlier this year. Companies, as well as consumers, are drawn to this beachfront oasis thanks to its close proximity to Miami and relative affordability in comparison.
We’re excited about investment opportunities in Ft. Lauderdale and here’s why.
2022 will mark a second straight year of double-digit rent growth for Ft. Lauderdale as multifamily availability remains below 2%1.
We’ve talked before about the ongoing migration to the Sunbelt, the region roughly synonymous with the Southern half of the U.S., and Ft. Lauderdale is certainly part of this trend. In-migration to this Florida metro is projected to reach over 15,000 residents this year, which would be the largest annual total in six years.1 Annual in-migration to the metro is projected to remain in the mid-10,000 range for the better half of the next decade.
With less than 2% of the area’s multifamily units available for rent1, new construction trailing by nearly 1,100 units over the last year1, and continued in-migration, we expect to see ongoing rent growth, as well as an increase in project proposals from developers looking to capitalize on the high demand amid low supply.
Among the nation’s fastest-growing labor markets at an expansion rate of 4.5%, Ft. Lauderdale is on track for a full job recovery in 20221.
Over the last year, every major employment sector gained jobs in the Ft. Lauderdale metro, with Leisure & Hospitality in the lead, adding over 12,500 jobs2. During the same time period, 13,500 jobs were added in office-using employment sectors, such as Professional & Business Services and Financial Activties2. Q1 2022 also saw a sharp increase in leasing activity for office buildings, up 150,000 sf from the same time a year ago2.
Home to the third busiest cruise port in the world, Port Everglades, we expect strong investment opportunities in Ft. Lauderdale’s hotel sector as tourism resumes.
After over a year of COVID lockdowns and uncertainty around vaccinations, tourism seems to be coming back. In March of 2022, demand for hotels in Ft. Lauderdale was up 15% from the same time in 2019. According to market research from the Greater Fort Lauderdale Convention & Visitors Bureau, this time period accounted for 19 of their Top 50 days by rooms sold. The same bureau reports that demand from both corporate and leisure travel has been strong in recent months, which is in line with data from the Ft. Lauderdale-Hollywood International Airport showing an increase of 33.7% in all passengers at the airport, with a 95.8% increase in international passengers.
What our investors are saying
Recently we asked a group of our investors who live in Ft. Lauderdale to share what excites them about the future of their city, as well as why they are optimistic about investing in the area. Jon S. shared that he sees “tons of growth and opportunity” in Ft. Lauderdale, and is optimistic about investing in Ft. Lauderdale because of the “demand to live, work, and play in the area”. Jack B. said what makes him optimistic about investment opportunities in the area is the “scarc[ity] of available land” and proximity to “areas with explosive growth [such as] Miami/South Beach, Boca Raton/Delray Beach, and West Palm/PalmBeach.”
What this could mean for investors
As in-migration continues to bring new residents to Ft. Lauderdale, these people will of course need a place to live. With less than 2% of units available to rent in existing multifamily properties, this area needs new developments to keep up with growing demand. As developers being to propose more projects to meet the demand, we see more opportunities opening up for investors interested in investing in multifamily in Ft. Lauderdale.
Investors in both new and existing multifamily properties in the area could also potentially benefit from rent growth being driven by increased demand amid low supply. As tourism and in-person office work begin to return, we’re also keeping an eye on hospitality and office investments in Ft. Lauderdale.
