In 2022, Evolve Companies unveiled plans to build a 141-unit apartment building in Miami’s Wynwood Norte neighborhood, targeting completion by 2024.
Instead of breaking ground, the developer listed the six-lot assemblage for $14 million earlier this year.
This isn’t an isolated case. Across South Florida, developers who once raced to capitalize on a booming rental market are now quietly putting entitled multifamily development sites up for sale, citing rising interest rates, construction costs, and tenant concessions.
“It’s no secret — the multifamily construction cycle is ending,” said broker Tony Arellano. “Costs are up across the board.”
The pivot comes as the region’s apartment market cools. Following a pandemic-era surge in demand and record rent growth, new deliveries are now outpacing leasing activity. From 2021 to 2024, more than 55,000 new apartments were completed across South Florida — the bulk being high-end rentals in urban cores like Wynwood.
Oversupply Meets Higher Costs
As inflation and elevated interest rates drive up development costs, many builders are opting out. Arellano and other brokers note that if a project wasn’t already under construction by 2023, chances are it’s now on hold.
Some developers are merely executing flip strategies — acquiring land, securing entitlements, and selling at a markup. Others are leveraging Florida’s Live Local Act, which offers enhanced zoning in exchange for affordable housing, to increase project value before offloading.
“Not all are backing out due to costs,” said broker Sebastian Faerman. “Some were never planning to build — they’re land players.”
Still, the underlying pressures are real. Broker Miguel Pinto of Apex Capital Realty said many developers bought land at peak pricing and are now saddled with properties that generate no income but carry heavy tax burdens and loan payments.
“They were overleveraged, expecting rents and rates to stay favorable,” Pinto said. “None of that materialized.”
Wynwood’s Saturation Point
Clara Homes is the latest to join the list of sellers in Wynwood. The firm purchased a half-acre site for $7.7 million and spent over a year designing the 147-unit Clara Wynwood tower, securing city approvals. But last month, it listed the site for $10.9 million.
“Pre-Covid, Wynwood had just two vertical buildings. Post-Covid, it has 36,” said Arellano, who is marketing the site. “We’ve oversupplied market-rate rentals.”
Rents in Wynwood reflect this. One-bedroom units now average $3,049/month — down 7% year-over-year, according to Zumper. Two- and three-bedroom units have also seen flat or declining rents.
Clara Homes founder James Curnin acknowledged the inventory glut but insists his decision to sell is strategic.
“I just want to move on to bigger and better things,” Curnin said, pointing also to Miami’s slow site plan review process.
Evolve Companies followed a similar path. The North Carolina-based developer entered the South Florida market in 2022 with two multifamily sites in Wynwood Norte, spending $18.8 million. After securing approvals for the first 141-unit building this spring, it listed the 1-acre site for $14 million and its second, 0.7-acre site — planned for a 105-unit tower — for $12 million.
“They’re not a Miami-based developer,” said broker George Belesis of Dwntwn. “We’ve lined up a solid JV partner for them.”
Whether Evolve will pursue construction or sell both sites remains unclear.
South Miami-Dade: Too Risky for Some
During the multifamily boom, developers also targeted south Miami-Dade for its cheaper land. Many of those sites are now hitting the market, as developers scale back or reassess feasibility.
“In Wynwood or Edgewater, they’re still going vertical,” said Faerman. “But in South Dade? There’s no reliable rent data — it’s untested.”
One such listing: A 2.6-acre site in Goulds bought by K2 Capital Group for $4 million. The firm recently proposed a 206-unit project but has listed the land for $6.3 million. Principal Esteban Koffsmon said the move is to test the market or potentially find a JV partner. Some developers are even switching from apartments to condos — but that’s not always feasible.
“Condo conversions only work for certain sites,” said Pinto. “Others are stuck seeking equity in a capital environment where investors prefer low-risk bonds over risky developments.”
Signs of a Turnaround?
Despite the wave of listings, some brokers see it as a positive signal — an early indicator that the market is warming.
“Construction costs are down, spreads are narrowing, and banks are returning to the market,” said Chris Lentz of Cushman & Wakefield. “We’re seeing higher transaction velocity.”
Lentz noted a recent sale by Swire Properties, which offloaded a nearly 1-acre Brickell site to Dubai-based Kerzner International for $45 million — a sign of international interest and renewed confidence.
Still, Pinto remains cautious.
“It’s not the trophy sites that are being dumped — it’s the B and C sites,” Pinto said. “Those overleveraged are now scrambling.”
Pinto expects more stability after Jerome Powell’s term as Fed Chair ends next year, potentially paving the way for interest rate relief. Until then, developers are left to weather the storm.
“They thought they’d build. The world turned on them,” Pinto said. “Now we’ll see who had a backup plan — and who was swimming naked.”
Source: The Real Deal