The Okaloosa - Walton Housing Summit, hosted by the Okaloosa and Walton County Health Improvement Partnership Committees, was held on Monday, May 13, 2024, at the Niceville Community Center. Topics included Live Local Act updates from the legislative session, economic and health impacts of housing, and related strategies.
Walton County Health Department Director Holly Holt explained the need for the summit. “Housing is an essential component to the growth of our healthy community. A healthy community should be one where an individual or family should not have to choose between housing and health.”
Attendees included State Representative Shane Abbott, Walton District 2 Commissioner Danny Glidewell, Walton County Planning Director Mac Carpenter, Walton County Economic Development Alliance Director Uriah Matthews and numerous Okaloosa County officials.
Representative Shane Abbott said he was struck by the number of public and private agencies that participated in the summit. “Everybody who is involved in housing in some shape, form or fashion was in the room. So that was amazing. There was something said in the early session that I thought was really good, which was that your local governments can look to see where they would like growth and housing to be at - and incentivize those areas. If the county has an area they think ‘This would be a good place to have infrastructure, and we want to try to steer housing and growth here’, that’s where we’ll incentivize it.
“We’re in a unique situation with both counties,” said Rep. Abbott. “We’re back to just pure supply and demand. We are in two of the fastest-growing counties in the entire state, the entire country, and so the demand is extremely high and when demand is that high, you lose affordability. I know everybody wants to be able to have affordable housing close to work-places, but sometimes you just have to look at the growth picture and go ‘That’s not going to work. I can’t put affordable housing on 30-A where all the restaurants are.’
Rep. Abbott said affordable housing can be done, but it won’t be easy due to land values. “By the time you buy the piece of sand it’s on, ‘affordable’ went out the window. We may be able to do affordable housing, but we may have to sacrifice driving distance. Probably, if we moved over to Holmes County and Washington County, we could probably build housing significantly cheaper than we can in Walton County.”
Abbott explained that the average sale price for a home in Okaloosa County is $300,000. In Walton County, it’s over $500,000. “When you have a demand like that, you can’t make housing affordable,” he said. “Then throw in the inflation rate, it just makes it even harder. It’s back to supply and demand.”
Commissioner Danny Glidewell noted that lack of truly affordable housing is not only one of the biggest problems in Walton County, but also among the most complex. “There are no easy solutions. Everybody recognizes the problem. We have a huge influx of people because Florida is where everybody wants to live,” he said. “Meanwhile, interest rates have gone up to where mortgages are not affordable. That’s not just mortgages on single family residents, that’s mortgage rates on multi-family structures, as well. So, developers are struggling to get financing for their projects. All those factors put together, and the huge inflationary increases in building costs – hardly anybody that is on a working wage can come close to affording any house at those rates.”
Glidewell said, “One of the solutions that was presented involved having government make land available to developers at a lower or no cost. That could be challenging politically, but it might be the only way we can get large production of housing. The underlying problem is ageless and simple. It’s basic economics – supply and demand,” he said. “Right now, we’ve got no supply and high demand. That’s going to create cost increases and that’s just the laws of economics.”
Economic Development Alliance Director Uriah Matthews also noted that, “The escalating housing costs have not only placed a burden on our residents but have also significantly increased the demands on nonprofits and community services. Housing is an essential element of economic development. The current pricing trends not only reflect a high demand but also highlight the urgent need for further development to stabilize costs. A healthy housing market is crucial for the well-being of our residents and the overall economic vitality of our community,” he added.
“As a representative of WCHIP, I would like to thank all of the partners who participated in the successful Housing Summit,” said Walton Health Department Director Holly Holt. “Key speakers, panel discussions and breakout sessions were held to move the discussion forward. WCHIP and OCHIP have workgroups taking steps to address housing in our community.”
Replies
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Beach Lover
Well for starters, they’ll need to encourage and build more of it, which will send folks like James Bentwood into a frenzy.
On a higher level than Stone Age Living, unless you are going to ban people from coming here, both via tourism and migration, the only answer is more critical infrastructure, more houses, etc. Sadly, it is inevitable that we will need to go from 95% vacant land to maybe 88-91% vacant land. I’ll pour one out for my homies.
On a higher level than Stone Age Living, unless you are going to ban people from coming here, both via tourism and migration, the only answer is more critical infrastructure, more houses, etc. Sadly, it is inevitable that we will need to go from 95% vacant land to maybe 88-91% vacant land. I’ll pour one out for my homies.
Beach Lover
Glidewell said, “One of the solutions that was presented involved having government make land available to developers at a lower or no cost. That could be challenging politically, but it might be the only way we can get large production of housing. The underlying problem is ageless and simple. It’s basic economics – supply and demand,” he said. “Right now, we’ve got no supply and high demand. That’s going to create cost increases and that’s just the laws of economics.”
Complete and total nonsense. The apartments at Riverwalk are 60% vacant. Hammock Bay, delivered 4 years ago - 50% vacant. That's before 300 units deliver at Owl's Head.
South of the bay the apartments by Dune Lakes are 9% vacant and they've been dropping rents because the apartments don't produce enough income to service the debt. Lofts at Seacrest with deeded beach access - 17% vacant. Origins - 13% vacant. The Southern on JD Miller - 16% vacant.
Market vacancy for multifamily aka apartments is 16%. Lenders and developers underwrite to 5-10% vacancy. Rental rates are dropping because there is too much supply. Asking market rents are $1.91 per foot which is lower than 4 years ago. Also there are a ton of units to be delivered - just to name 2 - the project by Helen McCall and the project by the high school will add 516 units to a tiny market with already high vacancy.
Developers aren't delivering units because the demand is objectively not there. Developers and their lenders will incur massive losses if they attempt to build in this market right now. Glidewell couldn't be more wrong.
Complete and total nonsense. The apartments at Riverwalk are 60% vacant. Hammock Bay, delivered 4 years ago - 50% vacant. That's before 300 units deliver at Owl's Head.
South of the bay the apartments by Dune Lakes are 9% vacant and they've been dropping rents because the apartments don't produce enough income to service the debt. Lofts at Seacrest with deeded beach access - 17% vacant. Origins - 13% vacant. The Southern on JD Miller - 16% vacant.
Market vacancy for multifamily aka apartments is 16%. Lenders and developers underwrite to 5-10% vacancy. Rental rates are dropping because there is too much supply. Asking market rents are $1.91 per foot which is lower than 4 years ago. Also there are a ton of units to be delivered - just to name 2 - the project by Helen McCall and the project by the high school will add 516 units to a tiny market with already high vacancy.
Developers aren't delivering units because the demand is objectively not there. Developers and their lenders will incur massive losses if they attempt to build in this market right now. Glidewell couldn't be more wrong.
SWGB
Glidewell said, “One of the solutions that was presented involved having government make land available to developers at a lower or no cost. That could be challenging politically, but it might be the only way we can get large production of housing. The underlying problem is ageless and simple. It’s basic economics – supply and demand,” he said. “Right now, we’ve got no supply and high demand. That’s going to create cost increases and that’s just the laws of economics.”
Complete and total nonsense. The apartments at Riverwalk are 60% vacant. Hammock Bay, delivered 4 years ago - 50% vacant. That's before 300 units deliver at Owl's Head.
South of the bay the apartments by Dune Lakes are 9% vacant and they've been dropping rents because the apartments don't produce enough income to service the debt. Lofts at Seacrest with deeded beach access - 17% vacant. Origins - 13% vacant. The Southern on JD Miller - 16% vacant.
Market vacancy for multifamily aka apartments is 16%. Lenders and developers underwrite to 5-10% vacancy. Rental rates are dropping because there is too much supply. Asking market rents are $1.91 per foot which is lower than 4 years ago. Also there are a ton of units to be delivered - just to name 2 - the project by Helen McCall and the project by the high school will add 516 units to a tiny market with already high vacancy.
Developers aren't delivering units because the demand is objectively not there. Developers and their lenders will incur massive losses if they attempt to build in this market right now. Glidewell couldn't be more wrong.
Except that you're comparing apartment complexes to affordable housing which is what Glidewell was discussing.
The developers are reluctantly building the apartments in Miramar Beach, land work started this week. I don't believe they'll be rushing the project.
Beach Fanatic
We live in a walkable community in Louisville. One or both of our hispanic restaurants have rented space for their workers to live (house). One is now building a new restaurant (3 stories) and in the back, will house the workers there. Ellen
Beach Lover
How many of those places are still clinging to asking for 2021 type rent? When half the country was shut down, remote work and stimulus checks ruled the day, everyone could afford to be in nice places. Now that stuff is gone and we are left with the good ole shitty NW Florida job market of old.
Beach Lover
Except that you're comparing apartment complexes to affordable housing which is what Glidewell was discussing.Fair. There's Affordable (subsidized) and affordable. I was reading him as the latter. For now the Affordable ship has sailed and the market will take care of itself without the need for new, subsidized housing. I'm guessing that Owl's Head will deliver and rents north of the bay will stabilize around $1 per foot. Riverwalk is 60% vacant asking $1.49/ft. I would bet all 3 larger multi projects trade hands in a distress situation at some point in the next few years. Maybe Riverwalk is ok bc of ownership and debt. HB traded in Oct 21 at nearly $300k/unit so that one's gonna be tough. I don't see a path for survival for Owl's Head.
The developers are reluctantly building the apartments in Miramar Beach, land work started this week. I don't believe they'll be rushing the project.
As for south of the bay, there are just massive deliveries coming with already high vacancies. Who knows where it settles but the next 24 months will probably be pretty ugly for multifamily ownership.
All in all it's completely opposite of what Gladwell said that there is no supply.
SWGB
I'm pretty sure the glut of apartments we've seen go up are eyeing the long term, possibly, when they can decide to go condo and sell of individual units.
I think Glidewell was referring to the period during COVID when we literally had no inventory of any kind. It was very much like 05/06, the difference being actual skin in the game which has delayed a crash/dip.
To be honest, this is why government usually has to build or subsidize housing, no one's doing it out of the goodness of their hearts. I think the best thing the county could do now is identify a large parcel they own or could buy reasonably and work with Habitat for Humanity which has strict guidelines for who receives the finished product.
I think Glidewell was referring to the period during COVID when we literally had no inventory of any kind. It was very much like 05/06, the difference being actual skin in the game which has delayed a crash/dip.
To be honest, this is why government usually has to build or subsidize housing, no one's doing it out of the goodness of their hearts. I think the best thing the county could do now is identify a large parcel they own or could buy reasonably and work with Habitat for Humanity which has strict guidelines for who receives the finished product.
SoWal Insider
I'm pretty sure the glut of apartments we've seen go up are eyeing the long term, possibly, when they can decide to go condo and sell of individual units.Whoa slow down now. Are you actually suggesting we mix the proletariats with the bourgeoisie in Sowal?
I think Glidewell was referring to the period during COVID when we literally had no inventory of any kind. It was very much like 05/06, the difference being actual skin in the game which has delayed a crash/dip.
To be honest, this is why government usually has to build or subsidize housing, no one's doing it out of the goodness of their hearts. I think the best thing the county could do now is identify a large parcel they own or could buy reasonably and work with Habitat for Humanity which has strict guidelines for who receives the finished product.
Beach Fanatic
Glidewell said, “One of the solutions that was presented involved having government make land available to developers at a lower or no cost. That could be challenging politically, but it might be the only way we can get large production of housing. The underlying problem is ageless and simple. It’s basic economics – supply and demand,” he said. “Right now, we’ve got no supply and high demand. That’s going to create cost increases and that’s just the laws of economics.”Please keep posting - it is great to have someone in the know, with facts and figures!
Complete and total nonsense. The apartments at Riverwalk are 60% vacant. Hammock Bay, delivered 4 years ago - 50% vacant. That's before 300 units deliver at Owl's Head.
South of the bay the apartments by Dune Lakes are 9% vacant and they've been dropping rents because the apartments don't produce enough income to service the debt. Lofts at Seacrest with deeded beach access - 17% vacant. Origins - 13% vacant. The Southern on JD Miller - 16% vacant.
Market vacancy for multifamily aka apartments is 16%. Lenders and developers underwrite to 5-10% vacancy. Rental rates are dropping because there is too much supply. Asking market rents are $1.91 per foot which is lower than 4 years ago. Also there are a ton of units to be delivered - just to name 2 - the project by Helen McCall and the project by the high school will add 516 units to a tiny market with already high vacancy.
Developers aren't delivering units because the demand is objectively not there. Developers and their lenders will incur massive losses if they attempt to build in this market right now. Glidewell couldn't be more wrong.
I've posted a lot of new apartment projects in the last couple of years - so many I can't remember them all.
Here are some:
The Sandbar - 330 Multifamily, Commercial, Hotel on U.S. 98 | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/no-public-hearings-required-for-330-unit-apartment-bank-hotel-project-in-santa-rosa-beach/[/URL] By DOTTY NIST No public hearings will be required for The Sandbar, a large apartment/hotel/bank development proposed for the south side of U.S. 98...
sowal.com
$50M Construction Begins: The Grove at Seascape Resort | SoWal Forum
The Highland Group is pleased to announce that construction is set to begin for The Grove at Seascape Resort, a luxuriously appointed, multi-phase development within the Seascape Golf, Beach & Tennis Resort in Miramar Beach, Florida. This expansive project is set to redefine luxury living on the...
sowal.com
Arcadia at Hwy 20 - 352 Apartments in Freeport | SoWal Forum
The agenda item coming forward with the most proposed units was Arcadia at Hwy. 20, consisting of 352 multi-family units on 26.9 acres. The property is located on the southeast corner of the Hwy. 20/CR-83A West intersection, west of Freeport. It had been rezoned by the Walton County Board of...
sowal.com
510 multi-family units, 138,000 sf commercial on US98 at Peach Creek | SoWal Forum
By DOTTY NIST [URL unfurl="true"]https://defuniakherald.com/news/conceptual-plan-okd-for-apartments-aging-in-place-development-on-old-barretts-store-property/[/URL] A recently-approved conceptual plan has set the stage for one of Walton County’s most historic properties to transition into the...
sowal.com
Hawk's Landing - 150 townhomes at Chat Holly Road | SoWal Forum
Hawk's Landing Townhome Community: Request to approve by final order. Project MA]20-000023 is being reviewed by Stephen Schoen. This is a major development order application submitted by Nautilus Civil Engineers, Inc. on behalf of Southstar Communities requesting to construct a phased...
sowal.com
63 townhome units at Moll Drive - Helen McCall Park | SoWal Forum
Moll Townhomes - Request to approve by final order. Project number MAJ23-000006 is being reviewed by Tim Brown. This is a major development order application submitted by Emerald Coast Associates Engineering, LLC on behalf of SRB Land, LLC, requesting approval to develop 63 townhome units with...
sowal.com
The Landing at Santa Rosa - 40 townhomes East Hewett Rd | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/planning-commission-takes-up-townhomes-subdivisions-commerce-park-gym-facility-amendments-and-abandonment/[/URL] [I]By DOTTY NIST[/I] The Landing at Santa Rosa is a proposal for 40 townhomes, clubhouse amenity, pool, and infrastructure on 10.03...
sowal.com
42 Townhomes on Goldsby Rd North of 98 | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/trc-oks-scenic-sothebys-addition-advances-mcdonalds-and-other-projects/[/URL] The Walton County Technical Review Committee (TRC) July 5, 2023 [I]Dotty Nist[/I] Hidden Pines Townhomes was one of two major projects on the meeting agenda that was...
sowal.com
300 Apartments + Commercial in Freeport at 331 and 3280 | SoWal Forum
At this time known only as EMF Freeport (Encore Multi-Family, LLC) - Apartments just north of the 331 bridge on land owned by 331 Town Center LLC Not certain if this is related to "Encore at 331" already approved 258 apartments nearby to the north... [URL...
sowal.com
A thread on affordable Housing in Walton County:
Walton County Affordable Housing | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/walton-county-affordable-housing-advisory-committee-discussion/[/URL] Can a teacher afford a home in Walton County? By RUBY KEARCE At the July 18 meeting of the Walton County Affordable Housing Advisory Committee (AHAC) committee member Teresa...
sowal.com
Beach Lover
There is a tried and true solution to expensive housing. It’s as old as time. Works every time. And everyone knows what that is. Build.
Beach Fanatic
There is a tried and true solution to expensive housing. It’s as old as time. Works every time. And everyone knows what that is. Build.Move to a place more affordable is better.
Beach Lover
edit - I'm terrible at the quote function.
Thanks. I knew I had replied to one of them and you linked it. We can watch this in real time now. From December I posted this -
"Hammock Bay is *asking* $1.82 per foot and is at 9% vacancy with a great amenity package. Market is at 13% vacancy (all per CoStar)."
Now they are at 49.3% vacancy and asking $1.77 per foot. Property manager has to be freaking out. It sold for $67,000,000 in Oct 2021. At 400 units, that's going from 36 empty units to 197 empty units in 6 months. Not coincidentally, around this time Riverwalk delivered 312 units. They are asking $1.49 per foot and are at 59.5% vacancy. 185 units sitting empty BUT they filled up 127 units. Really looks like a lot of the tenants in HB moved to RW. Market vacancy is 15.6% (not sure how Costar is determining "market" probably auto pulling a comp set based on location) - up from the 13% I posted in December. Between those two that's 382 empty units and 330 filled units in Freeport, and that's before Owl's Head delivers another 300 units. This is gonna be a bloodbath.
Also from that thread in December - "Asking rents are at $1.78 next to Dune Lakes, 280 units delivered in 2020 and still at a 17% (!!!) vacancy. 331 delivered in 2018 asking $1.74 and at 12.5% vacancy."
Now DL at 8.9% vacancy, asking $1.97 per foot. 331 at 3% vacancy, asking $2.10 per foot. 280 and 264 total units respectively. Not sure if some is seasonality because I haven't tracked it but that's quite an improvement for both. Still - did read a week or so ago that DL was on watchlist because it was at a 0.80x debt service coverage. Almost certain it was floating rate debt so until treasuries see lower yields DL ownership will probably be coming out of pocket to keep it current.
I've posted a lot of new apartment projects in the last couple of years - so many I can't remember them all.
Here are some:
The Sandbar - 330 Multifamily, Commercial, Hotel on U.S. 98 | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/no-public-hearings-required-for-330-unit-apartment-bank-hotel-project-in-santa-rosa-beach/[/URL] By DOTTY NIST No public hearings will be required for The Sandbar, a large apartment/hotel/bank development proposed for the south side of U.S. 98...
$50M Construction Begins: The Grove at Seascape Resort | SoWal Forum
The Highland Group is pleased to announce that construction is set to begin for The Grove at Seascape Resort, a luxuriously appointed, multi-phase development within the Seascape Golf, Beach & Tennis Resort in Miramar Beach, Florida. This expansive project is set to redefine luxury living on the...
Arcadia at Hwy 20 - 352 Apartments in Freeport | SoWal Forum
The agenda item coming forward with the most proposed units was Arcadia at Hwy. 20, consisting of 352 multi-family units on 26.9 acres. The property is located on the southeast corner of the Hwy. 20/CR-83A West intersection, west of Freeport. It had been rezoned by the Walton County Board of...
510 multi-family units, 138,000 sf commercial on US98 at Peach Creek | SoWal Forum
By DOTTY NIST [URL unfurl="true"]https://defuniakherald.com/news/conceptual-plan-okd-for-apartments-aging-in-place-development-on-old-barretts-store-property/[/URL] A recently-approved conceptual plan has set the stage for one of Walton County’s most historic properties to transition into the...
Hawk's Landing - 150 townhomes at Chat Holly Road | SoWal Forum
Hawk's Landing Townhome Community: Request to approve by final order. Project MA]20-000023 is being reviewed by Stephen Schoen. This is a major development order application submitted by Nautilus Civil Engineers, Inc. on behalf of Southstar Communities requesting to construct a phased...
63 townhome units at Moll Drive - Helen McCall Park | SoWal Forum
Moll Townhomes - Request to approve by final order. Project number MAJ23-000006 is being reviewed by Tim Brown. This is a major development order application submitted by Emerald Coast Associates Engineering, LLC on behalf of SRB Land, LLC, requesting approval to develop 63 townhome units with...
The Landing at Santa Rosa - 40 townhomes East Hewett Rd | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/planning-commission-takes-up-townhomes-subdivisions-commerce-park-gym-facility-amendments-and-abandonment/[/URL] [I]By DOTTY NIST[/I] The Landing at Santa Rosa is a proposal for 40 townhomes, clubhouse amenity, pool, and infrastructure on 10.03...
42 Townhomes on Goldsby Rd North of 98 | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/trc-oks-scenic-sothebys-addition-advances-mcdonalds-and-other-projects/[/URL] The Walton County Technical Review Committee (TRC) July 5, 2023 [I]Dotty Nist[/I] Hidden Pines Townhomes was one of two major projects on the meeting agenda that was...
300 Apartments + Commercial in Freeport at 331 and 3280 | SoWal Forum
At this time known only as EMF Freeport (Encore Multi-Family, LLC) - Apartments just north of the 331 bridge on land owned by 331 Town Center LLC Not certain if this is related to "Encore at 331" already approved 258 apartments nearby to the north... [URL...
A thread on affordable Housing in Walton County:
Walton County Affordable Housing | SoWal Forum
[URL unfurl="true"]https://defuniakherald.com/news/walton-county-affordable-housing-advisory-committee-discussion/[/URL] Can a teacher afford a home in Walton County? By RUBY KEARCE At the July 18 meeting of the Walton County Affordable Housing Advisory Committee (AHAC) committee member Teresa...
Thanks. I knew I had replied to one of them and you linked it. We can watch this in real time now. From December I posted this -
"Hammock Bay is *asking* $1.82 per foot and is at 9% vacancy with a great amenity package. Market is at 13% vacancy (all per CoStar)."
Now they are at 49.3% vacancy and asking $1.77 per foot. Property manager has to be freaking out. It sold for $67,000,000 in Oct 2021. At 400 units, that's going from 36 empty units to 197 empty units in 6 months. Not coincidentally, around this time Riverwalk delivered 312 units. They are asking $1.49 per foot and are at 59.5% vacancy. 185 units sitting empty BUT they filled up 127 units. Really looks like a lot of the tenants in HB moved to RW. Market vacancy is 15.6% (not sure how Costar is determining "market" probably auto pulling a comp set based on location) - up from the 13% I posted in December. Between those two that's 382 empty units and 330 filled units in Freeport, and that's before Owl's Head delivers another 300 units. This is gonna be a bloodbath.
Also from that thread in December - "Asking rents are at $1.78 next to Dune Lakes, 280 units delivered in 2020 and still at a 17% (!!!) vacancy. 331 delivered in 2018 asking $1.74 and at 12.5% vacancy."
Now DL at 8.9% vacancy, asking $1.97 per foot. 331 at 3% vacancy, asking $2.10 per foot. 280 and 264 total units respectively. Not sure if some is seasonality because I haven't tracked it but that's quite an improvement for both. Still - did read a week or so ago that DL was on watchlist because it was at a 0.80x debt service coverage. Almost certain it was floating rate debt so until treasuries see lower yields DL ownership will probably be coming out of pocket to keep it current.
Beach Fanatic
Seems like with all the units coming online in SoWal and on 331 south of 20, Hammock Bay and Owls Head are going to have to drop prices quite a bit to get leases.
Admin
edit - I'm terrible at the quote function.Great info thanks for the post.
Thanks. I knew I had replied to one of them and you linked it. We can watch this in real time now. From December I posted this -
"Hammock Bay is *asking* $1.82 per foot and is at 9% vacancy with a great amenity package. Market is at 13% vacancy (all per CoStar)."
Now they are at 49.3% vacancy and asking $1.77 per foot. Property manager has to be freaking out. It sold for $67,000,000 in Oct 2021. At 400 units, that's going from 36 empty units to 197 empty units in 6 months. Not coincidentally, around this time Riverwalk delivered 312 units. They are asking $1.49 per foot and are at 59.5% vacancy. 185 units sitting empty BUT they filled up 127 units. Really looks like a lot of the tenants in HB moved to RW. Market vacancy is 15.6% (not sure how Costar is determining "market" probably auto pulling a comp set based on location) - up from the 13% I posted in December. Between those two that's 382 empty units and 330 filled units in Freeport, and that's before Owl's Head delivers another 300 units. This is gonna be a bloodbath.
Also from that thread in December - "Asking rents are at $1.78 next to Dune Lakes, 280 units delivered in 2020 and still at a 17% (!!!) vacancy. 331 delivered in 2018 asking $1.74 and at 12.5% vacancy."
Now DL at 8.9% vacancy, asking $1.97 per foot. 331 at 3% vacancy, asking $2.10 per foot. 280 and 264 total units respectively. Not sure if some is seasonality because I haven't tracked it but that's quite an improvement for both. Still - did read a week or so ago that DL was on watchlist because it was at a 0.80x debt service coverage. Almost certain it was floating rate debt so until treasuries see lower yields DL ownership will probably be coming out of pocket to keep it current.
Beach Lover
Didn't see this one coming out of the ground but it is now. 258 units with a $40 million construction loan.
liveoakcontracting.com
Looking at the multi market in Freeport. First two are in lease up, HB was pretty well occupied but Riverwalk opened and rents south of the bay dropped and now they are half empty.
Madison at Owl's Head - 300 units - 90% vacant - asking $1.95 per foot.
Riverwalk - 312 units - 48% vacant - asking $1.50 per foot
Hammock Bay - 400 units - 49% vacant asking $1.81 per foot
A few south of the bay
Dune Lakes - 280 units - 9% vacant - asking $1.93/ft
Sanctuary 331 - 264 units - 2.3% vacant - asking $1.94/ft
Terra Mar - 310 units - 7% vacancy - asking $1.85/ft
So for now south of the bay is mostly stabilized, albeit with, like 2018 rents, but there are a ton of deliveries coming. Freeport is in trouble for a while. Can't believe a bank closed on a construction loan in Freeport late last year.
Arcadia 331 – Live Oak Contracting
Learn more about the luxurious Arcadia 331 apartments developed by Love Oak Contracting in Freeport, FL. Contact our apartment builders today.
liveoakcontracting.com
Looking at the multi market in Freeport. First two are in lease up, HB was pretty well occupied but Riverwalk opened and rents south of the bay dropped and now they are half empty.
Madison at Owl's Head - 300 units - 90% vacant - asking $1.95 per foot.
Riverwalk - 312 units - 48% vacant - asking $1.50 per foot
Hammock Bay - 400 units - 49% vacant asking $1.81 per foot
A few south of the bay
Dune Lakes - 280 units - 9% vacant - asking $1.93/ft
Sanctuary 331 - 264 units - 2.3% vacant - asking $1.94/ft
Terra Mar - 310 units - 7% vacancy - asking $1.85/ft
So for now south of the bay is mostly stabilized, albeit with, like 2018 rents, but there are a ton of deliveries coming. Freeport is in trouble for a while. Can't believe a bank closed on a construction loan in Freeport late last year.
Beach Fanatic
Owl's Head trying to get SoWal prices? WTF
Hammock Bay I could almost see but still.... Loooong way from civilization and the beach.
Hammock Bay I could almost see but still.... Loooong way from civilization and the beach.
SWGB
South of the bay may be full, for now, but end of season will bring a lot of broken leases.
Beach Lover
James - one thing interesting I wish I had been tracking is concessions. Owl's Head is offering 2 months free, so effective rents are $1.62. Concessions are normal in lease up, but 2 months shows how bad it is (typically a month). Riverwalk, also in lease-up, is offering 3 weeks free (5.8% - could mean some are getting half month, some whole, not sure). Despite 49% vacancy, HB is not offering concessions. Guessing they are still trying to process going from 9% vacancy to 49% in a matter of months. Honestly the entire Freeport multi market is trying to figure out why their actual numbers are so far off what they modeled.
Don't see anyone offering concessions south of the bay (1% or less). To Matt's point - they would probably only be collecting their deposit if they did.
Don't see anyone offering concessions south of the bay (1% or less). To Matt's point - they would probably only be collecting their deposit if they did.
Beach Lover
South of the bay may be full, for now, but end of season will bring a lot of broken leases.Good time to revisit this out of my own curiosity. These are as of 10/4/24. All info from costar.
Madison at Owl's Head - 300 units - 88% vacant - asking $1.95 per foot. 0% concessions (I know this is wrong)
Riverwalk - 312 units - 36.7% vacant - asking $1.52 per foot. 4.1% concessions (probably a mix of new concessions and burn offs)
Hammock Bay - 400 units - 36.3% vacant - asking $1.83 per foot. 1% concessions.
Dune Lake - 280 units - 11% vacant - asking $1.95 per foot. 1% concessions.
Sanctuary 331 - 264 units - 11% vacant - asking $1.78 per foot. 1% concessions
Terra Mar - 310 units - 6.8% vacant - asking $1.70 per foot. 0.8% concessions.
NEW
The Beacon (by SWHS) - 260 units - 99.6% vacant - asking $2.02 per foot. 16.7% concessions (about 2 months free)
In Freeport, of these 3 multis with 1012 units, we went from 616 empty (61% vacant) to 524 empty (52% vacant) from July to October. Rents slightly down but about constant. Not terrible considering the off-season. Still a ton of units to absorb with many more under construction.
Of the first 3 in south Walton, of these 3 multis with 854 units, we went from 53 empty (6.2% vacant) to 81 empty (9.5% vacant) from July to October. Rents however dropped from averaging around $1.91/ft to around $1.81/ft.
So south of the bay, rents are down and vacancy is up. North of the bay is about holding steady with tenants bouncing around. Really interested to see how the new construction impacts the market. The one behind SWHS (The Beacon) is just starting to lease 260 units. Really interested to see how the one on Moll by St Rita (Saltaire - 256 units) delivers and continues to push down rents in the area. If anyone wants me to add a development to the list let me know - there are a few that I haven't tracked but can start.
Beach Fanatic
Good time to revisit this out of my own curiosity. These are as of 10/4/24. All info from costar.Very much appreciated!
Madison at Owl's Head - 300 units - 88% vacant - asking $1.95 per foot. 0% concessions (I know this is wrong)
Riverwalk - 312 units - 36.7% vacant - asking $1.52 per foot. 4.1% concessions (probably a mix of new concessions and burn offs)
Hammock Bay - 400 units - 36.3% vacant - asking $1.83 per foot. 1% concessions.
Dune Lake - 280 units - 11% vacant - asking $1.95 per foot. 1% concessions.
Sanctuary 331 - 264 units - 11% vacant - asking $1.78 per foot. 1% concessions
Terra Mar - 310 units - 6.8% vacant - asking $1.70 per foot. 0.8% concessions.
NEW
The Beacon (by SWHS) - 260 units - 99.6% vacant - asking $2.02 per foot. 16.7% concessions (about 2 months free)
In Freeport, of these 3 multis with 1012 units, we went from 616 empty (61% vacant) to 524 empty (52% vacant) from July to October. Rents slightly down but about constant. Not terrible considering the off-season. Still a ton of units to absorb with many more under construction.
Of the first 3 in south Walton, of these 3 multis with 854 units, we went from 53 empty (6.2% vacant) to 81 empty (9.5% vacant) from July to October. Rents however dropped from averaging around $1.91/ft to around $1.81/ft.
So south of the bay, rents are down and vacancy is up. North of the bay is about holding steady with tenants bouncing around. Really interested to see how the new construction impacts the market. The one behind SWHS (The Beacon) is just starting to lease 260 units. Really interested to see how the one on Moll by St Rita (Saltaire - 256 units) delivers and continues to push down rents in the area. If anyone wants me to add a development to the list let me know - there are a few that I haven't tracked but can start.
Beach Lover
Good time to revisit this out of my own curiosity. These are as of 10/4/24. All info from costar.Revisiting the slow moving train wreck of area multifamily economics in the area. CoStar was hit with a collusion lawsuit last year so the quality of data isn't as great as it was a year ago but this gives you an idea of where things seem to be now. Showing market (guessing Freeport/South Walton and probably PCB) vacancy at 21.9%.
Madison at Owl's Head - 300 units - 88% vacant - asking $1.95 per foot. 0% concessions (I know this is wrong)
Riverwalk - 312 units - 36.7% vacant - asking $1.52 per foot. 4.1% concessions (probably a mix of new concessions and burn offs)
Hammock Bay - 400 units - 36.3% vacant - asking $1.83 per foot. 1% concessions.
Dune Lake - 280 units - 11% vacant - asking $1.95 per foot. 1% concessions.
Sanctuary 331 - 264 units - 11% vacant - asking $1.78 per foot. 1% concessions
Terra Mar - 310 units - 6.8% vacant - asking $1.70 per foot. 0.8% concessions.
NEW
The Beacon (by SWHS) - 260 units - 99.6% vacant - asking $2.02 per foot. 16.7% concessions (about 2 months free)
In Freeport, of these 3 multis with 1012 units, we went from 616 empty (61% vacant) to 524 empty (52% vacant) from July to October. Rents slightly down but about constant. Not terrible considering the off-season. Still a ton of units to absorb with many more under construction.
Of the first 3 in south Walton, of these 3 multis with 854 units, we went from 53 empty (6.2% vacant) to 81 empty (9.5% vacant) from July to October. Rents however dropped from averaging around $1.91/ft to around $1.81/ft.
So south of the bay, rents are down and vacancy is up. North of the bay is about holding steady with tenants bouncing around. Really interested to see how the new construction impacts the market. The one behind SWHS (The Beacon) is just starting to lease 260 units. Really interested to see how the one on Moll by St Rita (Saltaire - 256 units) delivers and continues to push down rents in the area. If anyone wants me to add a development to the list let me know - there are a few that I haven't tracked but can start.
Number of units is above so I'll just update the asking rents and vacancy. Concessions aren't accurate on costar so not bothering with that.
Owl's Head - asking $1.95 per foot - 80.3% vacant
Riverwalk - asking $1.51 - 26.4% vacant
Hammock Bay - asking $1.85 - 25% vacant
Dune Lakes - asking $1.98 - 11.4% vacant
Sanctuary at 331 - asking $1.98 - 7.6% vacant
Terra Mar - asking $1.87 - 7.4% vacant
Beacon by SWHS - asking $2.01 - 93.9% vacant
New to the party is Saltaire - 256 units still under construction, asking $2.33 for prelease I guess.
Also under construction is multi next to the Freeport Publix, looks like 2 separate projects on the west side of 331 in Freeport, one hidden on the north side of 98 near the new neighborhood Walmart, one east of Saltaire and several others that I'm not thinking of.
Bold prediction is in about 18 months rents south of the bay settle in around $1.50 per foot and north of the bay around $1.20 per foot with blended vacancy around 10%. Many will go back to the lenders.
BIG assumptions here but just throwing out there to show what that means if I'm right. For the Beacon, they probably underwrote rents at $2.25 per foot with 5% vacancy and 2% loss to lease (basically concessions and bad debt). Costar shows 254,741 rentable SF. That's about $6,396k in annual revenue. Assume a 35% expense ratio that's net operating income of $4,157k. They probably assumed a 5% cap rate so a value of $83 million. Now assume $1.50 per foot, 10% vacancy and 2% loss to lease. That takes NOI down to $2,623k. We'll say cap rates are now at 6% (generous) given higher interest rates and your value is now about $43 million. Again big assumptions but that's how investors are looking at this, back of the envelope. Actually discounting more than that but I'm trying to be fair.
Now we'll do Owl's Head. 401,680 SF. I'll assume they underwrote rents at $2 per foot, same vacancy, loss to lease and expense ratio assumptions. $3,138k NOI - 5 cap is about $63 million. They have debt of $53.8 million so their going in value assumptions had to be AT LEAST $75 million. New math - same assumptions in 18 months as above ($1.20/ft - 10% vacancy, 6 cap) - new NOI of $1,781k, value of about $29.7 million.
The reason so many of these were built (besides the ease of permitting them here) is because interest rates were artificially low for so long. That ship has sailed and as the construction loans mature, not only are they getting killed with lower revenue, their debt service has gone way up with reset interest rates. They'll never hit their debt service payments much less their covenants (probably 1.25x what is needed to service the debt) and so deal after deal after deal after deal will be going back to the lenders.
So to the original post, Glidewell's utter nonsense "having government make land available to developers at a lower or no cost..It’s basic economics – supply and demand... right now, we’ve got no supply and high demand. That’s going to create cost increases and that’s just the laws of economics" is comical. It's going to be a lot more ridiculous as more and more supply keeps coming online.
Edited
Beach Lover
Interesting......but not much detail re: rent etc....
Pineapple Willy's Housing Project
....this past November, work officially started on the 34 new units, each featuring three bedrooms and three bathrooms. They are being built off Moylan Road exclusively for staff at Pineapple Willy’s and Wicked Wheel.
Phase 1 of the project, consisting of 17 units, is set to be completed by the end of March. Construction on three additional duplexes will begin immediately afterward.
This four-and-a-half-acre property will provide housing for up to 102 employees of Pineapple Willy’s and Wicked Wheel
Pineapple Willy's Housing Project
....this past November, work officially started on the 34 new units, each featuring three bedrooms and three bathrooms. They are being built off Moylan Road exclusively for staff at Pineapple Willy’s and Wicked Wheel.
Phase 1 of the project, consisting of 17 units, is set to be completed by the end of March. Construction on three additional duplexes will begin immediately afterward.
This four-and-a-half-acre property will provide housing for up to 102 employees of Pineapple Willy’s and Wicked Wheel
Beach Fanatic
I remember hearing about some local restaurant owners doing something like this but I don't know if it went anywhere...
Pineapple Willy’s is tackling Panama City Beach’s housing issue by providing affordable homes for its employees.
One of the final wishes of the late owner of Pineapple Willy’s was to provide his employees with more affordable housing. This year, that vision is becoming a reality.
“Bill Buskell, the owner of Pineapple Willy’s had a vision, to address the housing issues in Panama City Beach for his employees. After Hurricane Michael, he had the idea that he was going to build employee housing. So this employee housing would work with the employees to give them reduced cost in housing because housing costs have risen over time. This should help bridge that gap,” said Darrell Sellers, Project Manager of Pineapple Willy’s.
Bill Buskell sadly passed away just 18 days before construction was set to begin on Pineapple Villas. However, this past November, work officially started on the 34 new units, each featuring three bedrooms and three bathrooms. They are being built off Moylan Road exclusively for staff at Pineapple Willy’s and Wicked Wheel.
Phase 1 of the project, consisting of 17 units, is set to be completed by the end of March. Construction on three additional duplexes will begin immediately afterward.
“We do have many employees who will drive an hour, an hour plus, some of them live locally, close by, but even if you live close if you live across the bridge, that commute can get very timely, especially peak season, so we’re trying to help everybody out,” said Sellers.
This four-and-a-half-acre property will provide housing for up to 102 employees of Pineapple Willy’s and Wicked Wheel.
Three years later, Buskell’s vision has become a reality—giving dozens of workers a place to live and thrive.
Pineapple Willy’s is tackling Panama City Beach’s housing issue by providing affordable homes for its employees.
One of the final wishes of the late owner of Pineapple Willy’s was to provide his employees with more affordable housing. This year, that vision is becoming a reality.
“Bill Buskell, the owner of Pineapple Willy’s had a vision, to address the housing issues in Panama City Beach for his employees. After Hurricane Michael, he had the idea that he was going to build employee housing. So this employee housing would work with the employees to give them reduced cost in housing because housing costs have risen over time. This should help bridge that gap,” said Darrell Sellers, Project Manager of Pineapple Willy’s.
Bill Buskell sadly passed away just 18 days before construction was set to begin on Pineapple Villas. However, this past November, work officially started on the 34 new units, each featuring three bedrooms and three bathrooms. They are being built off Moylan Road exclusively for staff at Pineapple Willy’s and Wicked Wheel.
Phase 1 of the project, consisting of 17 units, is set to be completed by the end of March. Construction on three additional duplexes will begin immediately afterward.
“We do have many employees who will drive an hour, an hour plus, some of them live locally, close by, but even if you live close if you live across the bridge, that commute can get very timely, especially peak season, so we’re trying to help everybody out,” said Sellers.
This four-and-a-half-acre property will provide housing for up to 102 employees of Pineapple Willy’s and Wicked Wheel.
Three years later, Buskell’s vision has become a reality—giving dozens of workers a place to live and thrive.
Beach Lover
Trending worse. Overall market vacancy 20.4%.
Owl's Head - asking $1.68 per foot - 84.7% vacant
Riverwalk - asking $1.44 - 24.4% vacant
Hammock Bay - asking $1.84 - 23.3% vacant
Dune Lakes - asking $1.97 - 11.1% vacant
Sanctuary at 331 - asking $1.96 - 4.6% vacant
Terra Mar - asking $1.78 - 7.1% vacant
Beacon by SWHS - asking $1.91 - 89.6% vacant
Saltaire - asking $2.31 pre-lease
New - The Pearl - near the neighborhood Walmart - 406 units - $2.06 per foot - 82.1% vacant
So in Freeport, counting the 3 major multifamily properties, 423 of 1,012 units are vacant. I'd say there are at least 700 new units under construction. As of the 2020 census there were 5,861 people living in Freeport with 959 households. Within 12 months we will have more vacant multifamily units in Freeport than the total number of households in the town as of the last census.
Owl's Head - asking $1.68 per foot - 84.7% vacant
Riverwalk - asking $1.44 - 24.4% vacant
Hammock Bay - asking $1.84 - 23.3% vacant
Dune Lakes - asking $1.97 - 11.1% vacant
Sanctuary at 331 - asking $1.96 - 4.6% vacant
Terra Mar - asking $1.78 - 7.1% vacant
Beacon by SWHS - asking $1.91 - 89.6% vacant
Saltaire - asking $2.31 pre-lease
New - The Pearl - near the neighborhood Walmart - 406 units - $2.06 per foot - 82.1% vacant
So in Freeport, counting the 3 major multifamily properties, 423 of 1,012 units are vacant. I'd say there are at least 700 new units under construction. As of the 2020 census there were 5,861 people living in Freeport with 959 households. Within 12 months we will have more vacant multifamily units in Freeport than the total number of households in the town as of the last census.
Beach Lover
Peak season update
Owl's Head asking $1.47 per foot - 70.3% vacant
Riverwalk asking $1.45 per foot - 24.4% vacant
Hammock Bay asking $1.88 per foot - 23.3% vacant
Dune Lake asking $1.89 per foot - 11.1% vacant
Sanctuary at 331 asking $1.78 per foot - 6.4% vacant
Terra Mar asking $1.76 per foot - 8.1% vacant
Beacon by SWHS asking $1.91 per foot - 63.1% vacant
Saltaire preleasing at $2.20 per foot
The Jewel (previously called it the pearl - multi near the neighborhood WM) asking $2.11 per foot, 60% vacant
Also new to the party are Ramsey Branch - east side of 331 south of 20 in Freeport - asking $1.82 per foot, 99.2% vacant and The Waters next to the Freeport Publix preleasing at $1.96 per foot.
Peak season, rents keep dropping and the only ones that I'm tracking that are near a stabilized occupancy are Sanctuary at 331, Terra Mar and to a lesser extent Dune Lakes. DL is also only covering 82% of their interest only debt from operational income as of FYE24.
Avg rents in Freeport dropped from $1.75 to $1.66 in the past 12 months. SW about the same but it's buoyed by new deliveries asking higher rates. If you take the 3 I looked at 12 months ago, avg rents went from $1.91 to $1.81. Vacancy in Freeport went from 61% to 50% in 12 months (61% to 30% not counting new deliveries) and 6% to 32% in SW (6% to 9% not counting new deliveries). Owl's Head dropped rents 25% and went from 90% vacant to 70% vacant in 12 months.
If this follows last year we should expect to see vacancy increase and rents decrease south of the bay after the summer season.
Pretty sure I said this before but the developers that are building these are underwriting to a 5-8% vacancy in year 3 with at least 3% annual rent growth and that's when they sell to a permanent owner like a REIT. I doubt Freeport gets inside a 10% vacancy for at least 3 more years and they'll have to do it with more rent drops. SW underwrote AT LEAST $2 per foot which is why you see preleasing and new deliveries there since they have a little margin of error to pretend they aren't above the market (and with concessions aka free months rent they are well inside of $2/ft). The vast majority of equity investors will get wiped out and several banks will have to take a loss to exit these.
Owl's Head asking $1.47 per foot - 70.3% vacant
Riverwalk asking $1.45 per foot - 24.4% vacant
Hammock Bay asking $1.88 per foot - 23.3% vacant
Dune Lake asking $1.89 per foot - 11.1% vacant
Sanctuary at 331 asking $1.78 per foot - 6.4% vacant
Terra Mar asking $1.76 per foot - 8.1% vacant
Beacon by SWHS asking $1.91 per foot - 63.1% vacant
Saltaire preleasing at $2.20 per foot
The Jewel (previously called it the pearl - multi near the neighborhood WM) asking $2.11 per foot, 60% vacant
Also new to the party are Ramsey Branch - east side of 331 south of 20 in Freeport - asking $1.82 per foot, 99.2% vacant and The Waters next to the Freeport Publix preleasing at $1.96 per foot.
Peak season, rents keep dropping and the only ones that I'm tracking that are near a stabilized occupancy are Sanctuary at 331, Terra Mar and to a lesser extent Dune Lakes. DL is also only covering 82% of their interest only debt from operational income as of FYE24.
Avg rents in Freeport dropped from $1.75 to $1.66 in the past 12 months. SW about the same but it's buoyed by new deliveries asking higher rates. If you take the 3 I looked at 12 months ago, avg rents went from $1.91 to $1.81. Vacancy in Freeport went from 61% to 50% in 12 months (61% to 30% not counting new deliveries) and 6% to 32% in SW (6% to 9% not counting new deliveries). Owl's Head dropped rents 25% and went from 90% vacant to 70% vacant in 12 months.
If this follows last year we should expect to see vacancy increase and rents decrease south of the bay after the summer season.
Pretty sure I said this before but the developers that are building these are underwriting to a 5-8% vacancy in year 3 with at least 3% annual rent growth and that's when they sell to a permanent owner like a REIT. I doubt Freeport gets inside a 10% vacancy for at least 3 more years and they'll have to do it with more rent drops. SW underwrote AT LEAST $2 per foot which is why you see preleasing and new deliveries there since they have a little margin of error to pretend they aren't above the market (and with concessions aka free months rent they are well inside of $2/ft). The vast majority of equity investors will get wiped out and several banks will have to take a loss to exit these.
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