Fueled by sustained job and population growth in the Tampa Bay area that has outpaced much of the nation, investors are continuing to flock to multifamily rental investments regionwide, property records show.
Most notably, Houston-based Camden Property Trust last month spent $126.3 million to acquire an 18-story apartment tower in downtown St. Petersburg, at 330 Third St. S.
The 358-unit tower, the former AER Apartments -- renamed the Camden Pier District — was completed last year. The project also contains ground-floor retail space and an adjacent, five-story parking garage.
Richard Campo, Camden's chairman and CEO, says the purchase should generate a yield of 5% in its first year after stabilization is achieved and the building is fully leased, which is expected later in 2018.
He adds the company had another compelling reason to pursue the property.
“We believe the purchase price is 5% to 10% below current replacement cost,” Campo says.
In all, Camden owns 156 apartment projects nationwide, containing more than 53,000 units.
Camden's deal came as Equus Capital Partners, a Philadelphia-based investment firm, acquired another St. Petersburg apartment complex for $64.1 million.
Equus Capital's $64.1 million purchase of the Reserve at Gateway complex, at 500 Trinity Lane in the city's Carillon Park business community, marks its first area transaction since selling the eight-building, Bay West office complex in Tampa's Westshore district last month for $20.25 million.
The 314-unit complex, which was completed in 1999, was renovated beginning in 2013 with roughly $8,000 per unit spent to upgrade and add flooring, appliances, countertops, cabinetry and fixtures.
Reserve at Gateway, which was 93% occupied at the time of the sale, also features 9-foot and 10-foot ceiling heights and concrete-block construction.
“Investors are interested in the Tampa area's really strong economic fundamentals,” says Ryan Crowley, transaction manager at ARA Newmark, who together with firm Executive Managing Director Patrick Dufour, Vice Chairman Richard Donnellan Jr. and Director Scott Ramey represented the New York-based seller in the sale. Newmark Knight Frank's Capital Markets team also arranged for financing for Equus.
“Last year, for instance, the Tampa area added roughly 3,800 new apartment units, but there were between 35,000 and 40,000 new jobs created, and positive employment growth has occurred now for several years,” Crowley adds.
“So by that statistic alone, we're very undersupplied, and it's also why occupancy and rental rates have remained strong.”