For some of Kodsi\u2019s Class A, well-located apartment complexes, capitalization rates are still about 5 percent, he said.\u00a0<\/p>\n
\u201cIf you are buying at a 5 percent cap rate and borrowing at 4.5 interest but add all the fees, you are not getting the benefit of financing,\u201d he said.\u00a0<\/p>\n
Higher cap rates imply lower values, which could mean a better deal for buyers but not for sellers. The bid-ask gap, or the delta between the higher prices sellers expect for their properties and the lower prices buyers are willing to or can pay, remains.\u00a0\u00a0<\/p>\n
The outcome: Many buyers are still in the market but sellers aren\u2019t willing to divest for less than what they expect for their property. Kodsi is frequently approached by investors interested in his multifamily complex in Broward County and another one near Orlando, but he\u2019s turning them down.\u00a0<\/p>\n
\u201cWe need cap rates to drop and interest rates to drop, which would give us more value. That\u2019s really our biggest hesitation,\u201d said Kodsi, head of development firm Royal Palm Companies. \u201cMost groups are just holding on, waiting for interest rates to drop.\u201d<\/p>\n
On the retail side, roughly $605.7 million in sales closed in the first quarter, down 16 percent from last year\u2019s first quarter and 11 percent from the long-term first quarter average, according to CoStar.\u00a0<\/p>\n
Although leasing and rents are strong, the lack of interest rate relief is still freezing out leveraged investors, leaving only cash buyers and generational buyers in the game, said Gabriel Navarro of Pinecrest-based retail investment firm MMG Equity Partners.\u00a0<\/p>\n
\u201cThe bid-ask spread is wide because of where rents are sitting today and the strength of retail,\u201d he said. The bid-ask gap \u201cis probably 15 percent today. Both sides are being rational. It\u2019s just that they can\u2019t agree.\u201d<\/p>\n
Office sales fared better, closing out the quarter at roughly $836.5 million, 10 percent less than last year\u2019s first quarter but 16 percent over the long-term first-quarter average for South Florida, CoStar shows.\u00a0<\/p>\n
Sellers have had to part with properties for two reasons: Either equity partners are seeking an exit, or the landlords can\u2019t refinance maturing debt, experts said.\u00a0<\/p>\n
In some of this year\u2019s discounted trades, Chicago-based flex office provider Expansive parted with the five-story Edgewater office building for $19 million, or $2 million<\/a> less than it had paid in 2019. In February, the Shidler Group<\/a> surrendered the ground lease and leasehold interest in lieu of foreclosure for a Boynton Village apartment complex to Harbor Group International. The deal was valued at $79 million<\/a>, the same amount as the loan Harbor Group had provided in 2021.\u00a0<\/p>\n But much of the distress has worked its way through the market since interest rate increases started in 2022, meaning fewer sellers are offloading their properties due to debt woes, said Alex Karakhanian, who leads Miami-based Lndmrk Development. This also explains the drop in investment sales.\u00a0\u00a0<\/p>\n \u201cFrankly, no one\u2019s really selling,\u201d Karakhanian said. \u201cThe properties that needed to be sold or had to be sold due to debt volatility or issues with [refinancing] your debt \u2026 that kind of got cleared out over the last couple of years.\u201d<\/p>\n For buyers willing to search for a deal, the current climate isn\u2019t all bad. North Miami-based IMC Equity Group, for example, is looking for properties with cap rates higher than the interest.\u00a0<\/p>\n \u201cIf I buy at a 9 percent cap and borrow at 7 percent, and three years from now rates go down to 6 percent or 5 percent, I refinance,\u201d said IMC\u2019s Carlos Segrera. \u201cIt doesn\u2019t bother me as much. A quarter basis points up or down, we adapt. I just look for a different price.\u201d\u00a0<\/p>\n In January, IMC bought a Princeton apartment complex for $33.5 million<\/a>, a 24 percent discount from the property\u2019s last price in 2021.\u00a0<\/p>\n IMC joins a camp of investors that are not factoring more expensive financing, higher oil prices and the Iran War into their decision-making. While gasoline prices are up, the increases will settle at some point, Segrera relayed.\u00a0<\/p>\n \u201cIn no way we are saying, \u2018I feel the world is going upside down, I am not going to buy,\u2019\u201d Segrera said. \u201cSomething is always going to happen in the world. I can\u2019t do anything about that.\u201d<\/p>\n Bright spots\u00a0<\/p>\n Investors able to close commercial purchases without hunting for higher cap rates or distress are still in the mix, though their deals are sporadic.\u00a0<\/p>\n Those buyers are well-established South Florida players who have an unwavering commitment to the region. Moishe Mana \u2013\u2013 the biggest landlord in downtown Miami who plans to renovate aging buildings and turn the area into a campus-like hub connecting tech firms and entrepreneurs from North America and Latin America \u2013\u2013 grew his holdings, paying $110 million<\/a> for the One Downtown office tower.\u00a0<\/p>\n Billionaire Ken Griffin, who\u2019s also been an aggressive buyer of residential and commercial properties in South Florida since moving his firms Citadel and Citadel Securities to Miami in 2022, partnered with Goldman Properties on the $181 million<\/a> purchase of Wynwood\u2019s 545Wyn office building.<\/p>\n In another bright spot in the market, industrial investment sales have fared the best this year. Deal volume hit $824.4 million, 14 percent higher than in the first quarter of last year and 34 percent higher than the first quarter average from 2017, CoStar data shows.\u00a0<\/p>\n Industrial properties often have triple net leases, meaning tenants are on the hook for taxes, insurance and maintenance expenses, said broker Miguel Pinto, founder of Miami-based Apex Capital Realty.\u00a0<\/p>\n \u201cThe banks I am talking to all love industrial,\u201d Pinto said. \u201cWe are putting out a lot of transactions and closing hard, but all are on the industrial side.\u201d<\/p>\n
![\"President](\"https:\/\/www.newsbeep.com\/us-fl\/wp-content\/uploads\/2026\/04\/Impacts-of-Iran-War-on-Real-Estate--200x133.jpg\")
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