Market voices: Transformation

Mike Griffin Senior Vice President & Market Leader Savills

Besides continued rental rate increases and new development, one important factor is what’s happening around the University of South Florida in the Uptown area of Tampa. A lot of great things are happening there. The mall located in Uptown is the last piece of the pie and I would say, for the next 12 months, that is what I’m most excited about. I am focused on helping make that transformation occur because once that’s happened, there will be a greater connection to the growth that is happening north of there, with all the development opportunities between Interstate 275 and USF, the transit connection possibilities and the integration with USF, Mo©tt, AdventHealth and the VA. I’ve never been more optimistic in my 18 years of working in this market. All the pieces are in the right place.

There are several exciting real estate trends happening in our area. The Water Street & Channelside District is completely changing our skyline and will improve how we live, work and play in Downtown Tampa. This exciting urban development has become a mecca for those who enjoy the perks of condo living along the river and for healthcare, thanks to USF Health’s medical school being in the center of it all. Seminole Heights & Tampa Heights have seen a surge in home values due to its proximity to downtown, its hip neighborhood charm and the advent of Armature Works. Soon the new 52 acre Westshore Marina District on Westshore Blvd near Gandy will be complete and will provide a fresh, contemporary community for waterfront living, shopping, dining and recreation. Mary Jane

Rickles

Founder Live Well Team of Tampa Bay – Keller Williams

Andrew Wright CEO & Managing Partner Franklin Street

One of the ways that the growth in this region could be limited is if our infrastructure and local government are not able to keep up with the needs of the growing community. For example, we have seen transportation tax initiatives shut down time and time again over a 40-year-period. That being said, there has been a significant e™ort here locally. We saw that recently, when Hillsborough County voted in a 1% sales tax, which will be really transformative for the region. As we are hitting peak growth in this region, addressing transportation has now come to the forefront. We also have seen initiatives like the Florida Department of Transportation funding the $1.4-million-dollar infrastructure improvement over the I-275 West Shore interchange, the redevelopment of the Howard Franklin Bridge, and the concept of bus rapid transit and a multimodal hub station. As we start to see more of these types of initiatives, it will support more growth all around them.

Gregory Williams Principal – Cardinal Point Management

We chose to start our company in Tampa Bay for a variety of reasons. It has a great quality of life, beneficial business environment, attractive cost of doing business and a very manageable cost of living. Ultimately, we are focused on real estate, and the real estate market in Tampa Bay is quite broad. At the micro level, we are focused on the individual opportunity and risk we are taking on each deal. We are much more focused on these opportunities when they arise, so our approach is somewhat reactionary. On a macro level, we think that there will be continued population and job growth in this region, so for the foreseeable future we will want to keep doing more deals in Tampa, especially when those specific opportunities arise.

( ) Petersburg-Clearwater region has been characterized by modest but steady growth over the last few years, with a 3.9% increase in median home value between January 2019 and January 2020, from approximately $220,000 to $229,468. Even better news from an investment standpoint, Zillow estimates predict a 4.2% increase in home values through to the same time in 2021. This slightly lower median property value is likely a contributing factor in the region’s homeownership rate sitting at a comfortable 64.7%, somewhat higher than the nationwide average of 63.9%, with the largest share of households having a property value clustered around this median in the $200,000-$250,000 range. However, there are growing concerns that affordability is on the decline and threatens to drag homeownership down with it. These fears stem from data showing that many Tampa Bay residents don’t earn enough to afford homeownership. For example, average citizens of Hillsborough, Pinellas, and Pasco Counties, earn $54,000, $49,000, and $39,000 per year, respectively, but would need to earn $58,258, $60,284, and $44,877, respectively, to afford a home. As home prices continue to increase while wages stagnate, people are likely to fall even further behind. The geographic circumstances of the Tamp Bay region also impact residential trends, forcing a greater focus on density and vertical building, according to John Burpee, CEO of John Burpee & Associates. “The apartment market has seen a several hundred percent increase in rent prices since 2010. The average rent today is $1,200 to $1,400 for a twobedroom unit in the Tampa Bay market. The same thing is happening because Pinellas County is surrounded by water on three sides, there is nowhere to go but vertical. Downtown St. Petersburg is a prime example of a case in which increased density requirements and standards allowed for the entire city to become vertical. More tenstory buildings and higher have been built in the last 10 years compared to the 30 years before that. To reach its desired growth, Pinellas County has to relax standards and increase density per acre.”

The steadily increasing property values in the region make it ripe for investment, and several developers are capitalizing on the opportunity by undertaking major projects. One such project is the Azario Lakewood Ranch community being developed in east Manatee County by Taylor Morrison Home Corp. The development will be divided into two neighborhoods, Esplanade at Azario Lakewood Ranch and Park East at Azario. Residents of the Esplanade neighborhood will have access to a private 18-hole golf course, a wellness center, a culinary center, a resort-style pool, sports courts, a fitness center, and a full-time lifestyle manager who will help to plan special events and parties. Park East residents will have single-family homes with customizable floor plans.

A particularly hot component of the real estate development landscape is the high-rise luxury condo market. One of the latest additions to this niche is Arris Tampa, a 34-story condominium tower planned for the corner of Ashley Drive and Twiggs Street in the heart of Downtown Tampa. The tower is being developed by the same team that backed the Virage Bayshore tower in Tampa. Arris Tampa will feature a restaurant on the ground floor, ample parking, a rooftop Residents’ Club with an outdoor pool, and 80 residences spanning 1,110 to 3,700 square feet, with prices ranging from $600,000 to $2 million. The developer will break ground on the ( )