Interview: Leroy Moore, COO

Evolution

The Tampa Housing Authority is more than an affordable housing manager. It is focused on redevelopment to meet community needs

Leroy Moore COO – Tampa Housing Authority

How has the role of the of the Tampa Housing Authority evolved over the last few years to better service the community? The Housing Authority has evolved to not only manage affordable housing, but also to redevelop this housing into real estate that functions as more than just a roof over someone’s head. We consistently ask ourselves what else does a community need? A community needs jobs, quality food and transportation accessibility, which brings in the need for collaboration with transportation agencies in the region.

We can meet the needs of the community by developing housing, especially affordable and attainable housing, around accessible transit options. Great transit translates into better housing costs.

What steps is the Tampa Housing Authority taking to revitalize the 28-acre area now known as the Encore District? Seventy-five years ago, the Tampa Housing Authority developed a 28-acre superblock of public housing on the doorstep of what is now the Downtown district. Seventy-five years later, we are redeveloping that site and realizing that its potential today is far greater than what was ever imagined back then.

Instead of just having a 28-acre single-use affordable housing community, we now have 12 city blocks of diverse development called the Encore District.

Encore will be a LEED Gold neighborhood development community. All the buildings have a commitment to be LEED Silver or higher. We replaced the affordable and workforce housing and increased the number of affordable units on that exact same footprint. We are also adding other uses like hotels, museums, schools, market-rate housing and grocery stores all within the same 28-acre area.

What are the main challenges that the Tampa Housing Authority is facing? There are a couple of challenges. One is cost, which seems to be ever increasing. The construction workforce is becoming more scarce, and there is a large demand from projects competing for a limited workforce.

Cost is going to continue to rise as a result of that. There is also the fact that Tampa’s regulatory process for getting these deals permitted and in the ground has to be improved. Our new mayor is actually putting a lot of effort and thought into this, so I believe that will help mitigate this problem.

Brian Katz CEO & Founder – Katz Capital

The fact that real estate pricing in Tampa is still relatively attractive versus other markets, I believe insulates Tampa Bay to a degree from real estate sector cycles and general market cycles. This is the opposite of South Florida where there tends to be more dependency on these market cycles. When the South Florida market is hot, there is tons of money pouring in and prices push up. Although it’s increasingly on investors’ radar, Tampa Bay still has a lower modulation in these cycle waves. The big concern is that asset values keep rising. If we look at real estate development in the region, land values are up, labor costs are up and material prices are up. That means to achieve the same return for the amount of risk an investor is taking, you have to raise the exit price. This is going to be one constraint that Tampa Bay is going to face, and will have to figure out how to navigate.

( ) the same period; Tampa is the fastest-growing city in Florida; its population is rapidly expanding, fueling the need for additional housing; the cost of living is low relative to the U.S. average; Tampa is ethnically and culturally diverse; and the region has appealing weather that means it will always be in demand.

Commercial performance The Tampa Bay commercial real estate market finished 2019 favorably, with overall asking rents increasing significantly year-over-year by 5.6%, finishing at $27.54 per square foot. Class A rents fared particularly well, closing out the year up 6.4% YOY to $31.47 per square foot. This marks the third-consecutive quarter that Class A rents in Tampa remained above $30 per square foot. The high, and steadily increasing, asking rents on commercial property in Tampa are driven by consistently high demand among tenants. However, the commercial vacancy rate, which finished at 13.8% in Q4 2019, was inflated by the completion of new construction and a few high-profile move-outs, which resulted in negative net absorption of 325,000 square feet, the first occurrence of negative net absorption in the region since 2010.

One of the most active areas for new direct and subleases was the I-75 Corridor submarket, which finished the year at 21.1% vacancy and served as a significant contributor to the overall market’s high vacancy rate. Conversely, the central business district closed out Q4 2019 with a vacancy rate of 9.8%, the fifth-straight quarter with a rate below 11%. An additional 1.3 million square feet of office space is under construction throughout Tampa Bay, including the Water Street Tampa development, which will likely impact the vacancy rate in 2020.

Many also see the growth of e-commerce as a key market disruptor but that balance will be key in the near term. “We are seeing a blend of both online retail presence and brick and mortar, and that is a trend that we will continue to see for the next two to four years. Retail is going through an evolution, and that is not necessarily a negative thing. We will see significant changes over the next few years.” said Cindy Schooler, managing partner and market leader for Orlando and Tampa at SRS Real Estate Partners.

Co-working spaces are another area of growth that is reshaping how business is done in the area. “While there is some resistance from more traditional business owners, for millennials, who are the workforce’s new generation, sharing is the name of the game. Uber and Airbnb are but two examples that show we are leaning toward a culture of sharing. To grow sustainably, the first thing to consider is membership loyalty and to build it as a two-way street. We support our clients with flexibility based on their needs and how their business venture is evolving. Co-working spaces are primarily for entrepreneurs and smaller businesses, however large corporations find it attractive to utilize a coworking space and will often utilize our services.,” said Seidy Sleiman, general manager of Pipeline Workspaces.

Residential market The residential housing market in the Tampa-St. (