By Dick Hogan
Originally posted on July 19, 2007
Occupancy rates in Fort Myers’ big apartment complexes plunged 10.9 percent in the second quarter while rents edged up, according to a report released Wednesday by Novato, Calif.-based RealFacts. Rental complexes with 100 or more units — with a total of 4,249 apartments — were at 87.6 percent occupancy, down 10.9 percent from a year earlier, according to RealFacts, which provides data and analysis to the multifamily residential industry.
Meanwhile, the average rent for all units in the city rose 4.6 percent to $933 a month in the same period. For example, a three-bedroom, two-bath apartment averaged $1,178 in the second quarter of 2006 but went up to $1,209 in the second quarter of 2007 — a 2.6 percent increase. Jim Garinger of Colliers Arnold Southwest Florida, a real estate agent who follows the multifamily market, said occupancy rates in the big complexes dropped because of competition from other sources, including the conversion of apartments to condominiums.
“The amount of condo conversions that’s happened in the last two years has had a big impact,” he said. “Those units were pulled off initially as condominiums but now we see them coming back on and being rented. “That in combination with the regular condo products that were sold pre-construction and they were either sold to someone who’s renting them out or the developer decided to rent them.”
Apartment complexes also are competing with single-family homes that were built by speculators who weren’t able to sell at a profit, Garinger said. “You can rent a single-family, three-bedroom home in south Lee County for $1,800 a month.”
The underlying trend for the industry is still healthy, however, he said. “The absorption rate is still high. In terms of market conditions, we’re still just dealing with that excess of inventory.”
