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Multifamily Bonanza
Demand from young professionals for urban living accounts for a wave of development that could dump more than 1,200 condo units on the downtown Tampa market over the next 18 months.
By David R. Corder
Associate Editor
The makeup of the typical buyer tells Brooks Byrd all he needs to know about the demand for condominiums in downtown Tampa. They're young professionals, mostly male. And, interestingly after the sale, many quickly become engaged.
"So they end up having to change their selection of cabinetry, because they have a partner involved in their decision-making," says the vice president of The Byrd Corp., developer of the recently completed GrandView condo building on Tampa's Harbour Island.
Only five of 64 units are still for sale in the 20-story building the Clearwater-based developer built along the Garrison Channel. Nearly 70% of those sold from $235,000 to $850,000 prior to construction.
Such market demand accounts for a wave of proposed multifamily development that could plunk about 1,200 or more traditional and loft-style condo units on the market over the next 18 months within the 760 acres that form the city's central business district. That's an estimated construction value of more than $350 million on just eight major proposed projects.
"It does remain to be seen if all of these will come to pass," says Will Slemons, a multifamily market specialist in the Tampa office of Cushman & Wakefield of Florida Inc. "But the condo market has been hot."
Preconstruction sales activity at the Parkside of One Bayshore, a 17-story multifamily project at Bayshore Boulevard and Hyde Park Place, looks as if it surpassed the GrandView's performance. Already 82% of the condos are sold at the project that Charlotte, N.C.-based Crescent Resources Inc. started in mid-July. Completion on the condos and 11,000 square feet of retail space is scheduled for February 2005. Units there sold from $259,000 to almost $700,000.
"Out of 104 units, 85 are sold under hard contracts," says Jim Walters, a real estate agent for Parkside's exclusive listing agent - Tampa-based Smith & Associates Realtors Inc. "We even have a letter of intent from a retailer to buy the (retail) space," though he declined to identify the prospective buyer.
What enhances the current market demand for condos is the continuing encouragement from a mayoral administration that supports the contention that downtown residential growth bodes well for other market segments such as retail and office construction.
"(City officials) have been very supportive and encouraging of residential downtown, especially in the Channelside District, the edges of downtown and in Ybor City," says Ron Weaver, a Tampa land use attorney and long-time contributor to the Greater Tampa Chamber of Commerce's economic development policies. "Many of (the administrative staff) works well to fulfill the administration's policy of encouraging residential growth downtown."
The common denominator for all of this multifamily growth downtown is infill construction, Slemons says. "The (urban) infill products become so popular because that's where the young people want to move."
There also are two economic forces at work that either enable or encourage these young professionals to move to the urban core, Slemons says. Affordable mortgage interest rates accounts for one reason. "In all of residential, we're in an interest rate-driven market," he says. "I see only a slow move (upward) in interest rates. It's going to be a year to a year and half out before we see a spike in the interest rates."
The other reason is a market reaction to increasing land values in the nearby South Tampa community, a popular residential destination for young professionals. "Prices are so high in South Tampa," Slemons says. "As new projects go up in downtown Tampa, with very nice finishes - granite countertops and stainless-steel appliances - they're opting to do that rather than pay $200 per square foot for an old house in South Tampa."
Such forces create attractive opportunities for residential developers such as The Byrd Corp. The company's experience at the GrandView, for instance, only bolstered its resolve to build Downtown Channelside, a proposed mixed-use multifamily project on 3.56 acres of Port of Tampa property at Beneficial and Channelside drives. And it also drives the company's proposal to build 108 condo units on 1.25 acres of city-owned land as part of the Cultural Arts District Master Plan.
In partnership with the Stuart Golding Co. and Giunta Retail Properties, The Byrd Corp. proposes the development of two, 30-story multifamily towers with 250 units. Giunta Retail would build a 36,000-square-foot Kash n' Karry grocery story, with Stuart Golding charged with an additional 10,000 square feet of retail that would wrap around the grocery store. But the project is contingent on final contract negotiations with the Tampa Port Authority.
The Clearwater developer faces a challenge, however, in its bid to build multifamily in the Cultural Arts District. Responding to request for proposals, the company won Tampa City Council support to build the 108 units. But Dick Greco, former mayor, forgot to affirm the resolution. After she took office earlier this year, Mayor Pam Iorio took advantage of the technical omission to re-examine the district's development plan.
"I don't get the impression the new administration will pull (the bid) away," Byrd says. "They simply want to take a look at the matter. Mayor Iorio has said, 'We only get one shot, so let's get it right.' I can certainly respect that."
One thing is certain, Slemons says. The long-anticipated push for urban multifamily living in downtown Tampa now is a reality.
"This is the first time, other than the projects along Bayshore, where we've actually come to see it happen," he says. "People have been talking about it for a long time, but it's actually starting to happen."
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