CONSTRUCTION REAL ESTATE OVERVIEW
One factor behind the price gains is the inventory crunch in the Tampa Bay market that mirrors what other Florida and Sun Belt markets are experiencing. As of March, the Tampa-St. Petersburg-Clearwater MSA posted a 0.7 months supply of inventory compared to a 2.2-month supply in March 2020, according to data from the Greater Tampa Realtors®. That is a 69.6% decrease year over year, the group noted. For buyers, the inventory crunch creates bidding wars that force them to significantly increase their offers to improve their chances of placing the winning bid. “The residential inventory’s near zero now,” Jonathan Levy, co-founder and managing partner of Redstone Investments, told Invest:. “There’s nothing available in a reasonable price range. At the very high end and at the very low end there’s a little product but you have to be willing to either remodel something or afford a big ticket home. The number of people moving here is great,” he said. The tight housing market is also inf luencing professionals in the industry to be more nimble and look for opportunities around real estate, given the tight inventory levels. For example, Katz Capital has focused more on the insurance and servicing of residential and commercial real estate assets. “Thinking back to March 2020 when everything shut down, our biggest fear was that we were going to see a broad-based government shutdown. Fortunately, the economy slowly came back to life between April and July 2020. Our revenues are up over 100% compared to last year, which is remarkable,” Founder & CEO Brian Katz told Invest:. “Over the last year, we have made a number of strategic acquisitions covering insurance agencies, home services businesses and some commercial real estate,” he said. Still in acquisition mode, Katz Capital bolstered its insurance and asset servicing platforms as it navigated market uncertainty. “Our mindset has been more on the side of servicing real estate assets. Every building, every piece of dirt, needs insurance. If we can be the servicer of that client, that is what we are seeking. All of those buildings need a variety of home services, whether it is AC, plumbing or repairs. We have built up a platform to service the assets by being horizontally integrated through these acquisitions,” Katz said. Despite the market challenges, many of the trends accelerated by the coronavirus pandemic, namely the influx of in-migration from the Northeast, Midwest and the West Coast, as well as the adoption of work from home capabilities, bode well for the real estate market, which means good news for builders, developers and investors. The luxury market is directly benefiting from major business expansion and headquarter relocations
Bowen Arnold Manager & Principal DDA Development
What is the focus of the firm? Our focus primarily is on multifamily developments. We’ve done a little bit of everything, including marketrate housing, some affordable housing and some workforce housing. We did a condo project in St. Pete four years ago. We are also involved in mixed-use projects like the Orange Station in the Edge District of St. Pete. We really like urban deals, primarily in Tampa Bay and St. Pete. We’re at a point now where we don’t want to go to some of the more remote places in Florida. Our main focus is multifamily homes in the core of Tampa and St. Pete. What is your view of the Edge District? I think the Edge District is super exciting. If you look back six or seven years ago, there wasn’t much going on out there. Now, you have the new police station and you have restaurants and bars. There are five new multifamily developments that are ready to lease up right now. We’re going to bring 100,000 feet of office space, 22,000 feet of retail, 30 more workforce apartments, a 600-space parking garage and about 60 upscale condos. The city of St. Pete has recently released its request for proposals for the Tropicana Field site so we’re seeing developers from all over the country coming in. There are some big players coming in and it’s going to be interesting to see how it all plays out. This is all south of the Edge District. There’s huge potential in that area. I think it’s almost become the center of St. Pete. How are you preparing for the near term? For us, it’s full steam ahead. We’ll be doing the same thing we did in 2020. We did have to adjust more than in the past but we’ve been pretty fortunate that we were never knocked off our stride. We consider ourselves lucky to be in that position. We’re moving forward with our projects and looking for new deals. We think that the economy in 2021 is going to be surprisingly good. We’re excited and I think our markets are really strong. I think St. Pete is kind of a hidden gem as well as Tampa. www.capitalanalyticsassociates.com
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