MIAMI-DADE,
FL -- In much the same way the second quarter tends to be a high volume period,
the third quarter tends to cool off in comparison.
While
we’re still well above the level of activity seen during 2009 / 2010, 2013 is
shaping out to be the plateau we’ve been hesitant to acknowledge.
By
this time last year we had seen much stronger transaction volume across the tri
county area. Quarterly and annual price growth has also slowed.
While by no means a sign of a downturn, the
market is starting to hit its stride, like transitioning from sprinting to
running. This trend is characteristic of South Florida’s boom and bust cycles.
The question is how much longer will the market continue to hum along at this
moderate pace.
There are several factors
fighting for headline space which attempt to answer this question.
First, commercial CMBS maturities are scheduled to ramp up
significantly over the next few years until they peak in 2017. These maturities
may face headwinds at the prospect of rising interest rates which create more
problems for maturities.
 |
| Janet Yellen |
If Federal Reserve nominee Janet Yellen is confirmed many
believe she won’t live up to her dove-ish reputation and we could see rates
rise slowly, potentially pushing the tri-county area’s historically low cap
rates (6 – 7%) higher.
We believe she will balance
employment growth and rate increases to keep the market content.
On the other hand,
international investors have little concern for interest rates increasing a few
points when home-country currency exchange fluctuations could erase entire
fortunes overnight.
This will keep cap rates low
(relatively), making South Florida a more obvious example of recovery and
performance.
For a complete copy of the
company’s report, please contact:
Crystal Proenza
Vice President of Marketing
Colliers International South Florida
Commercial Real Estate Services
Tel: 305 476 7138
Email: crystal.proenza@colliers.com
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