Development in St. Petersburg proceeds despite a wave of new multifamily rental inventory in recent years.
St. Petersburg has experienced a raft of new apartment development in recent years, which has added thousands of new units to the city’s multifamily rental inventory.
But those additions haven’t kept Greystar Real Estate Partners from surging ahead with construction of a 36-story tower in the heart of the city’s downtown.
When completed in early 2023, Greystar’s Ascent St. Petersburg will add 354 rental units and be the 10th new apartment project developed in the city since 2016.
In all, more than 2,500 new units have been delivered since 2016 — Camden Pier District, Icon Central, Vantage Lofts and Avanti among them — according to research compiled by commercial real estate brokerage firm Colliers.
Greystar, a 28-year-old company that is today the largest apartment manager in the U.S. and one of the nation’s biggest developers, acquired the project’s land adjacent to Duke Energy’s offices in December for a record $15.07 million, property records show.
The First Avenue North property, once envisioned for a luxury hotel, had been vacant since 2005. It last sold in 2015 for $8.75 million.
And while the city has been the recipient of several new multifamily rental projects, commercial real estate experts say they expect Greystar’s project to do well.
“I think it’s going to be phenomenally successful,” says Casey Babb, executive managing director for multifamily investments at Colliers.
“It has one of the best locations in downtown St. Petersburg, there’s not a lot of direct competition nearby and it’s near a lot of cool restaurants and employment centers. It’s very unique.”
Greystar’s Ascent comes as the Charleston, S.C.-based company has formalized an agreement with Canada’s largest pension fund to invest more than $350 million to develop new apartment projects in coastal and high-growth U.S. cities, like St. Petersburg.
"We remain confident in the resilience of the rental housing industry despite the challenges and uncertainty of the long-term effects of the global pandemic," says Bill Maddux, executive managing director of development and construction at Greystar, in a statement.
Officials at Greystar, which manages more than 700,000 U.S. apartments and has an institutional investment platform with roughly $37 billion in assets, did not respond to inquiries regarding Ascent.
In addition to its apartments, the $117 million Ascent also will contain a 172-room AC Hotel by Marriott, nearly 7,000 square feet of retail space and a 500-space parking garage.
Wendy Giffin, a director at commercial real estate brokerage firm Cushman & Wakefield who specializes in St. Petersburg, says the mix will be a welcome addition to downtown.
“We’re finding there’s still a demand for housing and that a vast number of people want to lease and not own,” says Giffin.
She adds that multifamily rental projects in the city now stand at 97% occupancy and command average rents of $2,100 monthly — or $2.60 per square foot, well above national averages.
Babb notes, too, that while St. Petersburg has been flush in new apartment projects, the total number of units delivered since 2016 is roughly half the number that have been introduced in Tampa during the same period.
“So from that perspective, it makes sense,” he says.
Greystar’s project isn’t the only new offering slated to come to the market in the next couple of years.
At 334 Third Ave. South, Miami-based American Land Ventures is building a 22-story apartment building. Vibe, which is slated to contain 220 luxury units, is set for delivery in 2022.
A third project, at 440 Third Ave. South, will contain another 270 units when completed.
Not surprisingly, Greystar is quite familiar with the Tampa Bay area and the entire Gulf Coast region.
In 2018, it spent $82 million to buy the 400-unit Avana Westchase apartments in Tampa, the latest in a series of purchases.
That same year, Greystar completed work on the 286-unit Elan Rosemary apartment project just north of downtown Sarasota.
And in 2019, developers CC Residential and Barron Collier Cos. tapped Greystar to manage their 296-unit Addison Place, a new luxury apartment community in north Naples.
In St. Petersburg, though, Greystar’s new tower is expected to benefit from the city’s existing infrastructure and amenity base, which have drawn developers and investment from across the country.
“From a livability perspective, St. Petersburg leads the region,” Babb says. “It has waterfront parks, a solid mix of restaurants and bars, a thriving arts scene, the new municipal pier and excellent walkability to places like Beach Drive where people want to be,” he adds.
“St. Petersburg has been ahead of the curve from Tampa in that regard, though Tampa is now hitting its stride in terms of new residents,” Babb says. “People love St. Petersburg, and with good reason.”