Real Estate
AMAC, ROVR Acquire 285-Unit Site in Pompano Beach for $13.5M Amid Market Shift
AMAC and ROVR acquire 285-unit Pompano Beach site for $13.5M amid shifting South Florida multifamily market.
Key Takeaway
- AMAC and ROVR Development acquired a 285-unit multifamily site in Pompano Beach for $13.5 million, securing an $8.5 million loan from Maxim Capital Group.
- The South Florida multifamily market is cooling due to high interest rates, insurance costs, and construction expenses, leading to rent stabilization or declines.
- Art Falcone sold the site for better risk-adjusted returns in other ventures; he had purchased it for $10.6 million in 2022.
A Strategic Sale in Pompano Beach
Three years after receiving approval for a 285-unit multifamily project in Pompano Beach, Art Falcone has decided to sell the development site for $13.5 million. The 6.2-acre property, located at 3151-3251 North Federal Highway, was acquired by AMAC, led by Ivan and Maurice Kaufman, and Coral Gables-based ROVR Development. This transaction is notable given the current state of the South Florida multifamily market, which has seen a shift from the booming conditions of the past four years to a more cautious environment due to elevated interest rates, rising insurance costs, and high construction expenses.
The Details of the Transaction
The buyers, AMAC and ROVR Development, secured an $8.5 million loan from New York-based Maxim Capital Group to facilitate the purchase. The site, initially bought by Falcone for $10.6 million in 2022, had been approved for a 285-unit apartment complex featuring three seven-story buildings and a garage. The project was designed to include studios and one- to three-bedroom units, along with 4,400 square feet of commercial space. Despite the approval, AMAC’s Forman has not disclosed whether the firm will proceed with the original development plans.
South Florida's Multifamily Market Dynamics
The sale of the Pompano Beach site comes at a time when the South Florida multifamily market is experiencing significant changes. Over the past four years, the market was characterized by rapid growth and high demand, but recent trends indicate a cooling off. Elevated interest rates, increased insurance premiums, and high construction costs have led many developers to pause or reconsider planned projects. Additionally, the surge in new construction has resulted in a plateau or even a decline in rental rates in some submarkets, reflecting a shift in market dynamics.
Broader Implications for Real Estate Investment
Art Falcone’s decision to sell the Pompano Beach site highlights a strategic pivot towards other real estate investments that offer better risk-adjusted returns. Falcone’s focus has shifted to debt and equity investments in built-for-rent homes, master-planned residential developments, and hospitality projects. This move underscores a broader trend among developers and investors who are adapting their strategies in response to changing market conditions. The sale also reflects the ongoing demand for well-located development sites, even as the multifamily market faces headwinds.
Management Quotes
- Art Falcone, founder of Falcone Group and Encore Capital Management:
"Better risk-adjusted returns for his real estate firms. These include debt and equity investments into built-for-rent homes, master-planned residential developments and hospitality."
