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JBM® Executive Team

Featured 1

Jamie B. May
Chairman & CEO
T: 813.812.5000
C: 813.331.5000
JBM@JBM.com

Featured 2

Edward Yang
President
T: 407.456.8000
C: 917.579.2096
Edward.Yang@JBM.com

Featured 3

Eric Hoening
Director of Valuation
T: 813.812.5001
C: 813.629.6329
Eric.Hoening@JBM.com

Featured 4

Jonathan Barclay
Director
T: 813.812.5002
C: 813.493.9444
Jonathan.Barclay@JBM.com

Featured 5

Claudia Raines
Team Success Manager
T: 813.812.5003
C: 813.732.0435
Claudia.Raines@JBM.com

Featured 6

Melissa Marcolini Quinn

NorthMarq Capital
T: 407.418.5005
C: 407.222.7132
Mquinn@northmarq.com

Featured 7

Lee Weaver

NorthMarq Capital
T: 813.223.3088
C: 813.431.6251
Lweaver@northmarq.com

 

Featured 8

Tampa Bay Spotlight

Third Quarter 2016

The Tampa Bay market is made up of Hillsborough, Pinellas, Pasco and Hernando Counties (Axiometrics). The most notable metric is that the Tampa Bay market has experienced significant rent growth through 2015 and into 2016. Quarterly growth has ranged from 5.30% to 7.22% peaking in the 4Q 2015. Going forward, growth rates are tempered likely due to the abundance of units expected to be delivered throughout the market by year end 2016. Axiometrics projects growth in the 3.00% to 3.30% range in 2017 dropping to 2.50% in 2018. Occupancy rates are projected to remain relatively stable in the 95% range into the foreseeable future. Job growth continues an upward trend adding approximately 54,000 jobs to the MSA over past 24 months while the unemployment rate continues to decline settling in at 4.40% in March 2016, compared to 4.70% for the State (Department of Economic Opportunity).

Multifamily Housing Investment Market Trends & Highlights

Development Highlights

The skylines of Tampa and St. Petersburg are rapidly changing. Tampa is seeing several downtown projects underway with numerous others proposed. Forge Capital Partners expects to deliver their 220 unit project on Harbour Island in the fourth quarter only to see the Related Companies plant their cranes for another high-rise just one block away. On the mainland downtown, the Richman Companies is expecting completion of Aurora by the end of the Third Quarter while Nine 15 (362 units) and Framework are well underway on their 234 unit project in the Channel District. The Westshore Business District also has several projects under construction including Novus Westshore, Crescent Westshore and Grady Square. Each of these communities are expected to be completed by late 2016 and will add in excess of 900 units to the district.

Across the bay in St. Petersburg, the downtown area should see AER (formerly 330 Third) be delivered in the third quarter and The Hermitage delivered by year end. These high-rise communities offer condominium-style amenities and views. Outside of the downtown area, Gateway will see Peridot Palms (381 units) delivered in the third quarter which will be the next in a long line of high quality communities to be developed in the area which include Ibis Walk, Elan at Gateway, Azure and Tortuga Pointe.

Downtown Clearwater is also seeing new development activity. The Nolen (257 units) is expected to begin delivering units in late 2016 and will represent the first market rent units downtown Clearwater has ever seen. This four-story, elevator serviced community has extensive lake frontage and offers an innovative, trend-setting amenity package. The Nolen will be an iconic Clearwater community that will spark additional gentrification throughout the downtown core.

Even tertiary areas are seeing significant development activity. The Wiregrass area in Pasco County should see two new projects underway by year-end. Alta Terra Bella (Wood Partners) and Integra Junction along the S.R. 54 corridor are well underway and should be delivering units in the fourth quarter 2016.

The Tampa Bay market’s development pipeline is deep with over 8,000 units under construction or in lease up and over 13,000 in the planning stages. The quality of life of the Tampa Bay area will be a key component of the continued development of multifamily properties. Still, developers will be cautious in the near future as there is an abundance of units coming on line and a clear need for new, major employment drivers.

Transaction Activity

Featured 10

The Tampa Bay market has seen a large amount of transactions through 2016 with many being notable Class A assets such as Solaris Key, Jefferson Westshore and Crosstown Walk. The transaction pipeline is also flush with other merchant built offerings on the market or nearing a conclusion including Modera Prime 235, Modera Westshore, Skyhouse Channelside and Ibis Walk (exclusively listed by JBM®). Capitalization rates for Class A and B assets appear to have stabilized in sub-6.00% range based on Trailing 3 Month revenue and expenses adjusted for the transaction. Of note is that the pricing record set by the sale of Beacon 430 in downtown St. Petersburg (a JBM® transaction) of $260,000 per unit has set a trend for the market with Solaris Key trading for above the $200,000 per unit benchmark with others currently in the transaction pipeline expected to follow suit. Still, the overall median price per unit is $92,895 over the past 12 months (Real Capital Analytics) which is well below the national average of $138,135.The capitalization rate trend for Class B assets are driven by the value-add opportunity that 1990s and 2000s vintage communities provide whereby proven renovation strategies can yield up to $300 in rent premiums for new kitchens, baths and designer accouterments

Of note is the JBM® Team sold River Chase in June, 2016. This 776 unit community represents the largest community sold in Florida in 2016. River Chase was developed in three phases from 1988 to 1997 and makes up a large portion of the Temple Terrace submarket. The Property was sold by the Korman Residential family office and purchased by Blue Rock Partners, one of the region’s largest owner/operators with over 10,000 units in their portfolio.

Also notable is the JBM® Team sold Beacon 430 in September, 2015. This 326 unit downtown St. Petersburg asset was sold for $260,000 per unit representing the highest per unit price achieved for a wood frame, four-story community outside of Southeast Florida since the condo conversion era.

Transaction volume is up over the past 12 months in all measurable statistics including dollar volume, number of properties, total units and average price per unit. Record low interest rates are driving the transaction activity and the depth of the development pipeline will continue produce quality assets ripe for investment and long term holds. Interestingly, cross-border investment in the Tampa Bay market has all but vanished following a steady decline since 2013 (RCA). Institutional buyers have rebounded from limited activity in 2015 to make up 38% of the buyers in 2016.

As the Fed has met and chosen not to adjust rates, we expect strong transaction activity through 2016 and into 2017.

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Links to Previous JBM® Publications

JBM® Recent Transaction Activity
JBM® BrokerEdge Southwest Florida Highlights
JBM® Evolves Its Elite Services Platform by Partnering with NorthMarq Capital

 

Contact Us

100 North Tampa Street, Suite 1620, Tampa, Florida 33602

Tampa Office
: 1.813.812.5000

 

 

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