- February 24, 2024
Buoyed by market reaction to its Aer Apartments in downtown St. Petersburg three years ago, a Miami-based development firm intends to build a 22-story apartment tower nearby beginning later this year.
Like Aer, American Land Ventures’ new project at 334 Third Ave. South will focus on the luxury segment of the multifamily rental market — a niche that dovetails with larger demographic trends along the Gulf Coast and throughout the U.S.
Granville Tracy, American Land’s president, says the 220 units in the planned project are likely to rent from $1,700 per month to $4,000 per month.
“The new project is really an outgrowth of the things we learned while doing Aer,” Tracy says. “Two of the key things we learned, and both somewhat surprised us, were that people wanted larger units and better appointed units.”
That trend represents a stark contrast to apartment development a decade ago, when smaller units were marketed to Millennial renters and others.
“Fully half of the units in Aer were leased by people who were 40 years old or above,” Tracy notes. “So when we dug down into that, we found that that age group for renters was growing at twice the average of the rest of the population.
“Baby boomers, we found, are more likely to want to rent and keep their money in the bank and not have to worry about some of the issues surrounding home ownership. So we’re trying to gear our project in St. Petersburg to that market.”
Tracy expects American Land to deliver the 334 Third Ave. South project sometime in 2022.
Aer, by contrast, was sold in January 2018 a few months after its completion to Houston-based Camden Property Trust, which bought the 18-story project for $126.3 million — a then record amount for a multifamily rental project in the Tampa Bay area.
American Land becomes the latest in a series of developers in Tampa Bay proposing new projects to take advantage of job growth and population in-migration, which together have fueled multifamily rental demand — especially among younger renters and empty nesters.
Wendy Giffin, a director at commercial real estate brokerage firm Cushman & Wakefield who specializes in St. Petersburg, says there are roughly 1,900 new apartments and condominium units planned throughout the city — with a focus on apartments.
Most notably, apartment developer Greystar is planning a 36-story multifamily rental complex designed for 354 apartments, a 170-room hotel and 10,000 square feet of retail space in downtown St. Petersburg.
In Tampa, Water Street Tampa developer Strategic Property Partners has unveiled plans for at least one new apartment project within its $3 billion neighborhood, the first phase of which is now under construction.
Tracy, who went to school in St. Petersburg a few decades ago, says the city has garnered considerable attention from apartment developers and renters alike because the city’s downtown has evolved with a mix of live, work and entertainment options.
“Part of what makes downtown St. Petersburg so viable is the sheer attractiveness of how it’s evolved over time,” he says. “There’s so much to do now. It’s evolved so nicely, so organically. In many respects, it’s created its own demand because it’s just a place where people want to be.”
Tracy says American Land only sold Aer because its financial backer, Massachusetts Mutual, decided the offers for the 358-unit building represented a significant yield and met its investment criteria.
“They just felt it was a good time to monetize what they had created,” Tracy says of that project, which also contains ground-floor retail space and an adjacent five-deck parking garage and will be in the shadow of the 334 Third Ave. South development.
Camden Property Chairman and CEO Richard Campo, in comments at the time of the company’s acquisition, also felt Aer — now named Camden Pier District — represented a good investment despite the relatively high amount of money the company outlayed at the time.
“We believe the purchase price is 5% to 10% below current replacement cost,” Campo says.