UNITS

The 12 Month Absorption Units metric calculates the net change in occupied units during a 12month period, considering both new leases and units becoming vacant. A positive absorption writes down that more units were leased than vacated, showing a healthy demand and a potentially strong market. Conversely, a negative absorption suggests that more units became vacant than were leased, saying weaker demand or potential oversupply

As shown on graph above, while some submarkets such as Southeast Tampa and Pasco County show strong positive absorption rates showing healthy demand and leasing activity, other rates such as North Tampa and Northwest Tampa show negative absorption, suggesting higher vacancies or a slower leasing pace. It's important to analyze these absorption rates alongside other factors such as inventory units, under construction units, and asset values to gain a comprehensive understanding of each submarket's multifamily market dynamics.

Overall, rent growth is an essential metric in the multifamily real estate market as it reflects the interplay between supply, demand, and market dynamics. It influences investment decisions, property performance, and market competitiveness, supplying valuable insights for stakeholders in the multifamily industry.

Rent growth in Tampa's submarkets varies, with 70% of the submarkets experiencing exceptionally positive rent growth, this is the case of East Tampa, North Tampa, and South Pinellas, while others have seen modest declines such is the case of Southeast Tampa, and North Pinellas the rest of the r submarkets had minimal changes in rental prices. It's important to consider factors such as vacancy rates, asset value, and overall market conditions to get a comprehensive understanding of the rental market in each submarket.

Summary

Due to economic challenges and rising interest rates, and declining capitalization rates, investment activity in recent quarters has significantly declined across the Tampa Bay Multifamily Real Estate submarkets. The decrease in sales activity has persisted for three consecutive quarters, with the first quarter of 2023 experiencing the lowest transaction volume in the past ten years, totaling around $160 million. The second quarter of 2023 is on track to surpass this record, with only approximately $130 million traded so far.

Over the past 12 months, the total sales volume amounted to $1.1 billion. The largest transaction of the year occurred in August 2022 when Oaktree Capital Management bought 3939 Ehrlich Rd - Arbors at Carrollwood, a 780 -unit property in Northwest Tampa, for $99.8 million

Multifamily sale prices in Tampa Bay have steadily risen over the past decade, reaching a peak in early 2022. By June 2023, the average sale price per unit has declined to $236,000, coinciding with an increase in the Capitalization rate. This rise in the Capitalization rate suggests a potential market correction and the start of a seller's market, although it's still too early to tell whether this trend will continue.

The most active markets have been Southeast Tampa, Central Pinellas, North Tampa, and Northeast Tampa.