Chatter of a looming slowdown the multifamily market has been, well, looming for quite a while. But the Tampa Bay area, again, shows little sign of joining that club.
The latest evidence: The region — Hillsborough, Pinellas, Hernando and Pasco counties — set a sales record for multifamily properties in the first half of 2019, according to a CoStar Market Analytics report.
The report cites strong job growth and higher returns than other parts of the state as key factors in the surge. Tampa Bay's job growth, for one, is 2.2% annually, which ranks it No. 13 among the nation's 50 largest metropolitan areas. Also, multifamily investors appear to target Tampa Bay because it has a perceived higher yield than other markets in the state, including Orlando, CoStar Analyst Brian Alford in the report says. “It’s slowing down in most markets, but sales are accelerating in Tampa,” Alford adds.
The region, in total, posted $1.7 billion in multifamily sales in the first half of 2019. That’s up $400 million, or 30%, over the previous high of $1.3 billion in the first six months of 2016. Tampa’s 2019 first half also bested multifamily sales volume in the Orlando and South Florida markets, which each posted $1.3 billion, CoStar reports.
Broken down by 2019 quarter, the first one was good for $868 million in multifamily sales, followed by $824 million. The first quarter tally, CoStar reports, is the best first quarter in the region’s history and the second-best quarter ever behind the 2018 fourth quarter, which posted $906 million in deals.
One example of the flurry of deals comes at the end of the second quarter: TruAmerica Multifamily of Los Angeles paid $63.75 million, more than $140,000 per door, for the 192-unit Runaway Bay Apartments in Pinellas Park and the 262-unit Twin Lakes Apartments in Palm Harbor. The Kislak Organization of Miami Lakes sold the complexes.
Twin Lakes and Runaway Bay were both built in the 1980s, and each has average rents of about $1,100 per month with occupancies exceeding 95%, CoStar reports. TruAmerica officials, the report adds, plan major renovations to update the interiors of the apartments.