The Gulf Coast is no stranger to hurricanes, but the anticipation of more named storms reaching Florida, combined with other factors, has dramatically increased insurance premiums across the state. The rising rates, coupled with fewer insurance providers, have created a challenging environment for both Florida homeowners and multifamily developers. Subsequently homeowners have greater reason to lean more heavily on multifamily properties, increasing the demand, while developers are facing roadblocks to complete their construction projects.

“We’re hearing a lot of issues around homeowners, especially entry-level homeowners, they can’t get their arms around insurance,” said Charlie Keels, Encore Multifamily president. “It’s expensive or unattainable in Florida. And so, people are staying in apartments longer.”

While insurance premiums soar, Florida is also facing the largest population growth in the country, with a nearly 2% increase in 2022. Fortunately, the rising population has created a market tailwind for multifamily development projects, despite the fact that many developers are unable to obtain the insurance they need to succeed.

“Reinsurance rates and deductibles continue to increase at a record pace. But also, property management companies are struggling to find insurance at all. I’ve heard multiple stories where people cannot obtain insurance coverage for their property in Florida,” Charlie said.

Fortunately, this hasn’t been the case for seasoned developers such as Encore Multifamily, as it has been able to secure the coverage it needs in Florida, including a policy renewal as recently as June 1. And although the cost of risk remains high throughout Florida, the developer is finding ways to create positive outcomes through strategic risk mitigation, a deep bench of seasoned experts, and some fortuitous timing.

The demand for multifamily properties is expected to continue for the foreseeable future while simultaneously experiencing an insurance industry reset that commercial real estate is poised to emerge stronger from.


About Ignite Investments, LLC
Ignite is an independent, women-run, capital-raising platform representing select sponsors with a strong historical track record that points to continued growth. Ignite provides an extensive suite of strategic planning, marketing, investor relations, and administrative services for sponsors. With a database of more than 2,500 accredited investors, Ignite has over $350 million in equity under management representing $1 billion in value of current assets. For more information about Ignite, visit www.igniteinvestments.com.

About Encore Multifamily, LLC
Encore Multi-Family, LLC is a subsidiary of Encore Enterprises, Inc. and was founded in 2008 as a fully integrated multifamily developer, owner, and operator. The company is involved in all aspects of multifamily development projects and acquisitions, including ground-up developments, joint ventures, and mixed-use turnkey developments. For more information about Encore Multi-Family, LLC, visit www.encore.bz, or call (214) 259-7000.