4 minute read
Interview: Gary Godsey
foreign investment, is the EB-5 visa program. Tampa has warm weather, beautiful beaches, and excellent culture that make it a magnet for famous architects and highprofile developers, as well as the kinds of people who desire and can afford the properties they create. Water Street Tampa is an example of such development, and there is an abundance of luxury condos on the market and being developed that provide further evidence. Many of these projects receive funding through participants in the EB-5 program, which provides that any foreign national who invests at least $500,000 in a U.S. project that promises to create at least 10 long-term jobs can receive a visa and green card if the project is completed. Pre-purchasing a condo before completion of the building counts as an EB-5 investment, and also helps the developer complete construction of the building by securing additional financing, and is therefore a mutually beneficial arrangement. Historically, Tampa Bay receives a healthy amount of foreign investment from Latin America and China. However, despite its popularity, the EB-5 program has long been a point of contention among members of Congress, and there are even some calls for an increase in the minimum investment amount required to qualify, which could impact foreign investment in Tampa Bay in the future.
Looking ahead The longer term outlook for Tampa Bay’s real estate market is positive, despite the near-term disruption from COVID-19. Property values expected to continue to increase through Q3 2021, though not so radically that the market loses the advantage of its overall affordability. The population is also expected to continue growing, supporting demand for rental and sale options. With several major developments in the works, most notably Water Street Tampa, developers are trying to keep up with, and capitalize on, this demand.
“The land market, in general, is going to run similar to what the economy does. The demand for residential land is going to be dependent upon the 900 people a day migrating here. If suddenly the overall economy is hurt by something like the current coronavirus epidemic and people stop traveling here, then that will affect this market. When those kinds of changes happen, people just freeze up and they don’t do anything. Overall though, barring any further negative impacts, the economy will continue to do well on all fronts. We are still doing well and I do not see a slowdown on the horizon. We might have some market correction because it’s an election year, but overall we have a positive outlook,” said Dean Saunders, founder and managing director of SVN - Saunders Ralston Dantzler Real Estate. Gary Godsey Managing Director JLL
What are the most relevant commercial real estate trends happening in the local market?
We continue to see oce users looking to capitalize on eciencies as costs rise. Co-working is also a big trend recently. In terms of eciencies, we’ve seen investors spend their own capital to enhance their building amenities because users are looking to utilize those instead of spending their own capital within their space. The usage of technology across all sectors is another important trend JLL is heavily focused and invested in. When you look at industrial real estate, it’s all about e-commerce and big box distribution. Those continue to be major drivers within the industrial landscape.
Regarding coworking operators, we look to partner with some of those large coworking operations because we view it as a good option for some of our clients that are expanding within the market and even some new ones that are looking to get a foothold here and expand in the future. It’s a nice, flexible option.
Where do you see the most activity in the Tampa Bay Region in terms of commercial real estate in the next year or so?
It has always been in the core submarkets, like Westshore and the Central Business District (CBD). Historically, they’ve been the focus of development and I think that will continue. We are seeing new developments in areas like the Heights and Water Street Tampa. Time will tell how these developments impact the marketplace. I think they are both going to be extremely successful, but they are on the outskirts of the Tampa CBD. Perhaps we will see the core of the Tampa CBD start to shift. Additionally, if you just look at the rooftops in Pasco County and in South County, it makes sense for these areas to be considered for future commercial real estate development, despite the lack of transportation. I think we will see developers get creative and maybe look at areas like this. If you look at the I-4 corridor, that is going to continue to be a main driver in the industrial sector.
Construction & Infrastructure:
When construction is booming, it’s a good sign that the economy is doing well. Rather than any softening after years of growth, Tampa Bay’s construction fundamentals are improving. Material costs and an ongoing tight labor market are challenges, as is the COVID-19 pandemic, but low interest rates will continue to underpin activity and growth.
