IRR-Tampa Mid-Year Viewpoint 2015 Local Market Report - Multifamily
The apartment market continues to benefit from strong market fundamentals. Landlords are experiencing increasing net income as a result of low overall vacancy, rising rental rates, and limited concessions. There is strong demand for rental housing and new supply entering the market is being adequately absorbed by the marketplace. The demand for rental housing is observed for all types of multi-family housing, including upscale, downtown, suburban, low-income, and senior residences.
In Tampa Bay, the supply of apartments is expected to increase modestly in the near future and to be concentrated in communities with higher income levels, as well as within revitalized downtown locations of Tampa and St. Petersburg as well as the Westshore Business District. The existing supply of rental housing has benefitted from limited completions of new projects in prior years when new construction was not financially feasible and lenders were reluctant to provide necessary capital. The pace of new construction is expected to increase in coming years as developers work to satisfy pent-up demand for new product.
With a stagnant apartment supply, landlords were able to implement substantial rent increases in recent quarters. However, smaller rent increases are projected in the future as new product enters the market. Immediately following the economic recession, most apartment buyers were looking for older Class C projects that could be acquired at a distressed price and with upside potential for re-positioning following renovations and/or improved management. Over the past 24 months, sales activity has increased in all segments of the apartment market – Class A, B, and C, as well as Low Income Housing Tax Credit properties – as mortgage financing has become easier to obtain. Investors continue to seeking growth opportunities after several years with a dearth of transactions. Sale prices continue to rise as a result of falling capitalization rates and increasing investor demand. Overall supply is expected to increase over the next 2 years across all markets in this metro area.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.