About Hollywood Florida
If you’re looking to buy apartment buildings in Hollywood, Florida, then this article is for you. I’m going to go over just a few things that I would tell any investors that are looking at Hollywood, Florida as an investment market. There are obviously good things and bad things about Hollywood that you need to consider if investing in apartment buildings there.
Things that I like about Hollywood, Florida from a real estate investment perspective. Number one, it is the largest city located between Miami on the south and Fort Lauderdale on the north. It’s also probably the least developed area along that U.S. 1 corridor between Miami and Fort Lauderdale. There are a couple of smaller cities, but I kind of group them into Hollywood. Dania Beach is the one that I’m thinking of first and foremost. It’s kind of a suburb of Hollywood, Florida on the north.
Hollywood is kind of this, the whole area is an up and coming city. The reason it’s up and coming is that all of the investment money and development money went first into Miami. Once Miami started getting very pricey, that same money started moving into Fort Lauderdale, which is the second largest metro in the area. A lot of that development money has gone up there, but Fort Lauderdale has also become extremely expensive. Now, in between the two cities, you’ve got Hollywood. What’s happening is more and more investment is going into Hollywood, but there is still a lot of Hollywood that remains largely undeveloped in recent years. Now, it’s a built up city. It’s got plenty of buildings in it, and it’s got a good population. Basically, you drive along from Miami in the south, going north on U.S. 1, you’re going to go the whole way up, really, to West Palm beach or further, and you’ll not even notice anything but suburban city in there.
What I mean by Hollywood being less developed is that it has a lot of construction from the 1950s and ’60s, a lot of motels, a lot of multifamily and single family properties, many apartment buildings that were built back then, and there’s less of the new construction. Now, there’s plenty of new construction, but there’s a lot less of it than there is in Miami or Fort Lauderdale.
So the main hub in Hollywood is downtown, just west of where Young Circle and Hollywood Boulevard intersect. Hollywood Boulevard extends east-west across the city of Hollywood, but the main kind of downtown area is right there at the intersection of Hollywood Boulevard and U.S. 1, North Federal Highway. There’s a big circle there, a big traffic circle, called Young Circle. It also has a park in the center of it, an arts park, and a band shell and a couple of little art galleries. So that’s the main downtown area.
Just extending for a couple of blocks to the west of Young Circle, you’ve got the main downtown strip, which is Hollywood Boulevard and Harrison Street. That’s a couple of blocks of restaurants, shops, et cetera, and it’s a trendy little downtown area. What has happened there in the past three, four, five years is a lot of new operators have gone into that area in terms of starting up restaurants, wine bars, pubs, bars, that sort of thing, and it’s really become a trendy area for younger folks. Now, you do have one huge development on the northeast quadrant of Young Circle, and that’s called CIRC Hotel. It’s probably the largest building in the city of Hollywood. It’s a really large multipurpose, multi-use project that was completed a couple years ago. It is primarily condos and rental apartments. It also has some hotel, and it has retail on the ground floor.
Hollywood North of Young Circle
When we look at investing in apartment buildings in
Hollywood, Florida, we’re looking at just a few areas really. We like to focus
fairly close on the north and south side of Young Circle because that’s where
everything’s happening. Once you’re right there on Young Circle, or to the east
side of Young Circle on Hollywood Boulevard, Harrison Street, Tyler street, all
of those things, the properties there, that’s a very nice residential area. So
it’s become more difficult to pick up good deals on apartment buildings in
those neighborhoods. But the reason is they’re really becoming very nice
neighborhoods. So when we’re looking at apartment buildings in Hollywood, right
now where we’re focused on, is just north of Young Circle. Young Circle is on
Hollywood Boulevard. It’s the intersection between Hollywood Boulevard and US
1, or North Federal Highway.
Young Circle at Hollywood Boulevard, and then all the way up north to about
Sheridan Street. And then we stay just east and just west of US 1. Right now
you still have a lot of older apartment buildings, older motels. A lot of them
are small operations that have been owned by the same family for years and
years, just owners who have basically one or two motels and have operated them.
Many of them, they live on site in those motels. And what’s happening is,
because Hollywood has not been seeing the same development activity that Miami
and Fort Lauderdale has. These operators are still there, and a lot of these
properties, they have a lot of deferred maintenance, in both the apartment
buildings and the motels. And you can pick these up at numbers that still make
sense with the ability to still add some value through bringing them up to more
modern standards. So we like this location just because there is a good amount
of inventory.
Things are routinely coming on the market in this area, and it’s close enough
to Young Circle where we feel that, over the longterm, it’s going to be a very
good investment. On the east side, I guess we go as far east as we can get
because the further east we can go, the better the property value is going to
be. We go as far west as about a Dixie Highway. Now when you look at property
on the east of US 1, and on the west side of US 1 is a little bit of a
different look and feel. On the east side, is obviously nicer. There’s quite a
bit of nice residential property, nice single family homes, a lot of owner
occupants in area. On the west side of US 1 between US 1 and Dixie Highway,
there’s a lot of multifamily product, small apartment buildings, some single
family homes, and some motels. It’s got a little bit of a different type of
property mix. Just the general feel of the neighborhood when you go west of US
1 is a little bit different.
It’s more of a blue collar, low-income neighborhood, versus east of US 1, is
more of a middle class type of neighborhood. And I’m talking about north of
Hollywood Boulevard, south of Sheridan Street. Years ago, west of of US 1 and
east of Dixie, that whole area was really rough. There was a good amount of
crime and that sort of thing, but it’s really getting more and more cleaned up
because more and more investors are going in there and taking these old
buildings and turning them around. So that’s one of my favorite spots to invest
in Hollywood, Florida right now. You can pick up deals for around 100,000 a
door, maybe 110,000 a door on the west side of US 1. Whereas, in other areas,
you’re going to be paying 130 plus per door. You still get the advantage of
being able to reposition these buildings to the younger professional plat,
millennial, young professionals who want to live, work, and play near a
downtown area, which is provided by Young Circle in downtown Hollywood.
Hollywood South of Young Circle
Now we’re going to go South of Young Circle, but we’re going to still stay between a Dixie Highway on the west side and basically go over as far east as we can. When you get south of Young Circle, the look and feel of the neighborhoods gets a little bit nicer. You still have a big difference between properties and neighborhoods on the east side of U.S. 1 versus those between US 1 and Dixie Highway on the west side of US 1
Again, you have that same sort of difference in property types. You have more single-family homes, quieter residential neighborhoods east of US 1, although you still do have apartment buildings on that side, they just have a different sort of feel because there is more residential on the east side. On the west side, you’re definitely dealing with primarily apartment buildings, some commercial property, and fewer single-family homes when you’re looking between US 1 and Dixie Highway. South of Hollywood Boulevard, as compared to North of Hollywood Boulevard, you get the feel that there is more mature landscaping, older and larger trees, quieter streets.
So you have more mature landscaping South of Hollywood Boulevard and it’s not
because these plants and trees were planted any earlier than on the North side,
I think it’s simply that, I guess, development wise they’ve done a little bit
of a better job of preserving the older trees and it just has a slightly nicer
feel. This is especially true when you head East of US1 into the residential
neighborhoods there.
So I guess our number one spot to buy multifamily apartment buildings in
Hollywood right now is Southeast of Young Circle. And it’s just there are a lot
of older buildings in there, some of them are actually historic, they have
historic designations. We’ve done a couple of deals with those types of
properties and they look really nice, especially once you invest the capital to
bring them up to a modern standard. Update windows, repair stucco, get paint on
the buildings and they look really nice. And then they rent extremely fast.
So when you’ve got an older looking apartment building, one of the more classic
or vintage style apartment buildings, kind of a historic vibe, and you update
it, you will be able to rent them extremely quickly and for premium rents
because people really will pay for living in a smaller apartment building. It’s
kind of got a boutique feel to it.
So, we keep our eye on that neighborhood. It’s definitely become, like a lot of
areas, it’s become very expensive over the past few years, but you can still
find the occasional deal there. More recently we’ve been going into the area
North of Young Circle, simply because it’s easier to find deals that make sense
numbers wise. They cash flow better and they, better cap rates, and just the
numbers make a lot more sense.