What have been the most significant insights gained from the past year?

Capital accessibility, both equity investment capital and construction financing debt, faced challenges initially but showed signs of improvement in the latter part of the year. Cap rates in commercial real estate strengthened, continuing to decrease and setting record highs for home prices nationwide. Industrial and multifamily real estate segments are notably leading in terms of attracting capital, overshadowing other asset classes. Another striking development in recent months is the soaring prices in the for-sale housing sector, resulting in surging demand and intense bidding competitions with cash buyers acquiring properties within days.

What are the primary hurdles the industry is currently confronting?

Our most pressing challenge at present is the sharp escalation in costs. It’s not limited to land prices but extends to all construction materials, with lumber notably soaring by about 400%. While South Florida relies more on concrete for construction, this cost surge has had a profound impact on most other regions across the country.

How do you approach addressing the issue of workforce housing?

Delivering workforce housing in South Florida poses a considerable challenge due to soaring land prices, impact fees, and substantial construction cost increases. Achieving rents that generate a viable return becomes difficult when the costs of developing even a more basic version of workforce housing are high. We undertake this without relying on tax credits or bond financing. Our approach involves purpose-built workforce housing, where we meticulously design cost-efficient structures tailored for the workforce segment that cannot afford Class-A properties.