BUYER: Carter & Associates LLC (915 Franklin Street Project Owner LLC), Atlanta
SELLER: Kress Square IV LLC
PROPERTY: 910, 911 and 915 N. Franklin St., Tampa
PRICE: $6.4 million
PREVIOUS PRICES: $1,500,000, February 2005 and $750,000 and $622,700, May 2005
A new 23-story high-rise apartment tower is coming to downtown Tampa. Atlanta-based real estate investment firm Carter purchased an 1.02-acre block west of Florida Avenue for $6.4 million for the development.
The “Grant block,” east of Franklin Street, features two, two-story buildings and a three-story office building.
The developer plans to start demolition on the site Oct. 1.
Carter will then start developing a 23-story apartment tower with 362 apartment units. The development will also include 8,000 square feet of street-level retail and an eight-story, 460-space parking garage. The top level of the parking garage will be an amenity deck with a swimming pool, garden area and a clubroom. The project is currently unnamed.
Carter is not new to Tampa Bay, but it has been away from the market for more than a decade. It previously built a medical office building for Tampa General Hospital and an office building for Progress Energy.
The project also represents the return of two development executives to Tampa. Conor McNally, Carter's chief development officer, and Kyle Brock, Carter's senior vice president and project leader, were both previously with Novare Group Holdings LLC, the developer of Tampa's Skypoint and Element. The latter project also gave the two experience with a high-rise apartment in downtown Tampa. The real estate crash forced the developer to convert the 35-story Element condominium building to apartments.
The reason to build apartments comes down to financing, McNally says.
“The condo market is really back,” he says. “But the banks had so many deals go bad that there is still a very negative perception out there.”
However, the market and financing is ready in Tampa for apartments, he says, including at the rent levels necessary for a high-rise.
The Costar Group reports that the average asking monthly rent for the apartments it tracks in Tampa has risen to $976.28 and vacancies have fallen to just 3.6% for the most recent quarter.
“Everybody's full and raising rents,” says Darron Kattan of Franklin Street. “I'm just excited to see it for that part of downtown. It could sure use a shot in the arm, and I think this will be that shot.”
The site's location near both the downtown core and the central business district puts it within walking distance of a wide range of businesses, retailers and amenities, including the Riverwalk.
Casey Babb, vice president of investments and director of the National Multi Housing Group for Marcus & Millichap, says the project shows the continued emergence of downtown Tampa. His research shows there are 8,490 multifamily units under construction or planned for downtown Tampa and Westshore.
“It should do well,” Babb says. “The only question I have is how deep the pool is for people willing to pay $2,000 to $3,000 a month in rent, which is needed to support this level of construction. That $2-a-square-foot-plus rental market didn't exist at all until a few years ago.”
The project is expected to be finished in fall 2017.