The burbs are bubbling in Tampa Bay.
That’s a big takeaway from a CoStar analysis of the past 12 months, through November, of the still-hot Tampa area multifamily market. A trio of submarkets led the way: Central Pinellas, with $655 million in sales volume, followed by Southeast Tampa with $516 million and North Tampa with $500 million. That’s roughly half the market’s total multifamily sales activity, CoStar reports, which, through November at more than $3 billion, had already set an annual record.
North Tampa, though third in volume, was No. 1 in percentage increase, up 75% year-over-year. Central Pinellas was second, with a 67% increase. Southeast Tampa’s sales volume, in contrast, grew 3%. But that could more be “reflective of its sustained run of success,” the report states, rather than an indication of a slowdown. “Southeast Tampa has seen a rapid acceleration in investor demand,” the report adds, “with each of the past four years breaking the prior year’s record-setting mark.”
Some of the individual property sales were of high-end complexes, which can pad the overall volume. That list, CoStar reports, includes the Reserve at Brandon, a 982-unit complex in the Southeast Tampa market that sold for $123 million, and Peridot Palms, in Central Pinellas, which sold for $98.25 million. Both of those sale prices represent records for their respective markets.
Although deals like that created buzz and garnered headlines, in a secondary trend, the majority of the sales in the submarkets, the CoStar report shows, are what the industry calls value-add properties. To wit, nearly 85% of all multifamily sales in the region in 2019 were of mid-level properties or lower end workforce housing communities.
Meanwhile, the suburbs did so well in 2019 that they overshadowed downtown Tampa. That market posted $450 million in total sales, up 450% year-over-year, according to the report, and a new volume record — some 50% above its previous record. Downtown Tampa in 2019 include Olympus Harbour Island, which sold for $131.5 million, and Novel Riverwalk, acquired for $123 million.
CoStar projects the hot streak will continue. “While this year’s frenetic volume is likely unsustainable, investors are targeting the Tampa multifamily market like never before,” the report states. “Look for investment activity to remain elevated in 2020, with the suburbs and value-add once again leading the charge in the near term.”