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SOUTHEAST SNAPSHOT, SEPTEMBER 2005
Tampa Multifamily Market
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Sean Williams
Vice President
Apartment Realty Advisors
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The Tampa, Florida, multifamily market recently has seen its supply constrained by the large number of communities being converted to condominiums. For example, Apartment Realty Advisors either has sold or is marketing 13 communities of this type just in the Tampa area; these developments represent approximately 4,300 units with a transaction total of more than $525 million. Resulting from these conversions, vacancy has tightened incredibly, and throughout the Tampa Bay area, occupancy levels are hovering in the 98 percent range with limited concessions. Rental rates are ranging from $1.10 per square foot to $1.50 per square foot in the in-fill locations of St. Petersburg and south Tampa with the rates in the suburban submarkets currently standing at $0.80 per square foot to $1.00 per square foot.
The majority of new construction in the Tampa multifamily market is taking place along the Interstate 75 corridor. Land is more readily available in this sector, and a large number of jobs are being created through relocation of corporate campuses to this area, resulting in a higher level of support for new construction.
In addition, the cost of land has increased dramatically throughout the city; therefore, a limited number of new developers of rental properties are entering the market. Instead, this aspect has caused a shift in the business plans for existing developers. In effect, the majority of the projects currently being developed are in-fill, for-sale projects. The number of new rental developments has decreased in recent years, but the assets in lease-up are attracting young professionals, an emerging demographic in the area, as well as empty-nesters and those waiting to build homes.
One of the most significant new multifamily developments in the Tampa market is Mallory Square, a project located in the Westchase submarket near the employment centers of the Westshore office market and downtown Tampa. The community includes 283 units in 19 buildings, and it is scheduled to be complete in early 2006. This project, which represents one of the few remaining in-fill developments in the entire market, is being developed by Altman Development Corporation.
In the future, the New Tampa area, which is located in the northeastern section of Hillsborough County along the I-75 corridor, most likely will see the largest transformation. The condominium conversion trend has spread there as well, and a number of existing rental properties will be converted over the next 6 months.
— Sean Williams, vice president, Apartment Realty Advisors
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