Back in October, on a visit to Tampa, Jon Paul Pérez, heir apparent to The Related Group’s real estate empire, told the Business Observer that the company was bullish on Tampa and said the city was its second headquarters.
Less than a year later, Related has backed up that sentiment — with plans to build a more-than 1,000-residential unit mixed-use building across from downtown and by announcing it would build a second tower at the Ritz-Carlton Residences on Bayshore Boulevard. This as it continues to work on two major affordable housing projects in the city.
In all, the company has $1.5 billion in development across the region.
“All eyes are on Tampa right now — people and businesses continue migrating into the city because of its attractive lifestyle benefits, warm weather and friendly tax and business climate,” Pérez says in a late July interview. “This environment has led to pent-up real estate demand that has translated into higher rental rates, lower vacancies and higher prices for well-located condominiums.”
Just as important, Pérez says, given Related’s “development expertise” the company felt it was important to help fill housing gaps in the affordable housing market as well.
The company, which traces its roots to affordable housing, is working on the 120-acre West River Tampa development and it is the master developer on the Rome Yard development. Both are affordable housing projects in the city.
That there is a demand for housing in Tampa is a surprise only to those who haven’t paid attention. For about two years now the steady arrival of new residents has created a scarcity that’s driven rent and home prices up and long-time residents out.
Optimism is high
It is also not a surprise developers are stepping in to fill the hole.
Across the city and the Tampa Bay region, construction sites are popping up and buildings are coming out of the ground. In one South Tampa neighborhood alone, two apartment complexes are being built next to one another and will soon compete for space on a narrow city street to get their equipment in. Just a few hundred feet away, there are plans for 87 townhouses.
And that’s just one city neighborhood.
But with inflation, economists hope, nearing its peak, interest rates rising, housing starts slowing and fears of recession growing, the question is how long can the demand, and the associated building boom, continue? When will supply take precedence over demand?
Pérez is not overly concerned. He says sales and leasing rates in Tampa continue to increase.
“We’ve been studying the real estate market for 40 plus years and have overcome many ebbs and flows,” he says. “Economic headwinds are cyclical, but we remain highly optimistic about Central Florida and the state as a whole.”
The company is backing that up with big dollars.
Related has just spent $55.5 million on property near downtown Tampa, where it plans to a build a mixed-use development.
The project, which comes with $8 million for the expansion of the city’s Riverwalk, will include luxury market rate apartments and condominiums, as well as student housing and retail. The property will also come with 10 boat slips and a helistop.
In all, when complete, the development will include 32,760 square feet of retail and 1,079 residential units.
The property is made up of four parcels — two on Parker Street and one each on Keller and Cedar Avenues — and is on the west side of the Hillsborough River, across from downtown, near the site of the former Tampa Tribune building.
Related sees the area as soon being lined by retail shops and restaurants.
This part of town isn’t new for the company. In January, Related sold the 400-unit Manor Riverwalk apartment community to a Denver real estate investment trust for $225 million. That building is almost directly next door to where the new construction will go.
Just seven minutes and three miles away, Related plans to build a second tower for its Ritz-Carlton Residences project.
The new tower is going to be built on a portion of the land that currently occupies the Congregation Rodeph Sholom synagogue’s preschool and parking lot.
According to a statement from the congregation, “the synagogue has long been a candidate for re-development, but Related was able to deliver a winning proposal that best served the needs of the congregation.” One of those needs was that it wouldn’t have to move.
The plans call for a new terrace at the synagogue, improvements to the front lawn and new residential units currently occupied by the preschool and parking lot. According to the synagogue, Related plans to close on the property in January 2024.
A sales price for the property has not been disclosed, but the project, according to Related, is expected to top $100 million.
The second tower came into play after every unit in the first building, at 3101 Bayshore Blvd., was sold. When complete, the 27-story ultra-luxury residential tower will have 89 residences and 12 townhome-style villas with floor plans ranging from 2,400 square feet to 11,000 square feet.
Construction is expected to be completed in early 2024.
The second tower, about a half mile away, will be very similar Related says. The new building will have 94 residences and six villas and is being designed by the same architectural firm, interior design firm and landscaping architectural firm as the first. Amenities are nearly identical.
The floor plans, though, will be slightly different because the layout of the building will be different. But it will have the same views of the Hillsborough Bay.
Prices will start at $1.5 million.
The unmet demand in the city “allowed us to move the first tower at a record pace, while positioning us for continued success at this second phase,” Pérez says.