Walton, Okaloosa officials meet to discuss housing challenges
- Thread starter Mike Jones
- Start date
-
Trouble logging in? Send us a message with your username and/or email address for help.
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%.
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.
Last edited:
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
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.