Tampa Multifamily Investment Report
The Tampa Bay area is widely considered one of the most desirable and business-friendly regions in the country. Its established and growing economy contributes to Tampa Bay’s active multifamily rental market. From 2015 to 2019, the Tampa Bay market added 26,062 new units—more than half of the units in a nine county region, according to building permit data collected by real estate researcher CoStar Group.[i] With strong economic fundamentals, sustained employment growth and population in-migration, Tampa Bay continues to provide excellent opportunities in the multifamily sector.
Tampa Metro Population & Employment Metrics
Tampa is the 3rd-largest city in Florida, after Miami and Jacksonville, and the 53rd-largest city in the U.S. The Tampa MSA consists of Tampa, St. Petersburg, and Clearwater. Nearly 400,000 people live in the City of Tampa, and there are more than 3 million residents in the Tampa Bay/Hillsborough County metropolitan area. According to the Tampa Bay Economic Development Council, Tampa is projected to grow 3.3% annually over the next few years, and more than 126,000 new residents are forecast to move to the metropolitan area by 2024.[ii] The Tampa Bay area’s affordable cost of living, low tax environment with zero state income tax, excellent year-round weather and waterfront locations are attracting people and businesses to the region in record numbers.
Tampa’s vibrant economy is supported by a highly talented labor force in sectors that include healthcare, financial services, manufacturing, military, and technology. The city is home to the regional offices of a number of major corporations, including an emerging tech scene that includes Tampa Bay WaVE, Embarc Collective and TEC Garage. The headquarters of a growing number of Fortune 500 companies are based in Tampa, including Raymond James Financial, Tech Data, Jabil Circuit, Publix, Qurate, and Mosaic. Johnson & Johnson’s corporate services headquarters is based in Tampa, and global law firm Baker McKenzie’s new business services centers is located there as well. MacDill Air Force Base employs 22,700 and is the headquarters of CENTCOM and SOCOM.4. (JLL)
Data from the Bureau of Labor Statistics indicates that Tampa MSA employment has experienced a growth of 13.8% over the last five years through February 2020, and the unemployment rate of 6.8% for August 2020 is below both the Florida rate of 7.4% and the nation rate of 8.4%.[iii]
Multifamily Market
The Tampa/St Petersburg, Florida multifamily market is considered #4 in the nation for apartment building investments, according to Multifamily.loans.[iv] The ranking is due to several favorable factors, including employment growth, rent growth, vacancy rates, and construction of new units. Additionally, CoStar reported that Tampa topped $3.6 billion in sales during 2019, making it the first multifamily market in Florida to top $3 billion. And Mashvisor noted that more than half of the population – 53% – rent instead of own a home.[v] Furthermore, the annual PwC Emerging Trends in Real Estate: United States and Canada 2020 report ranks the Tampa-St. Petersburg real estate market at position #11 among the 80 surveyed markets. [vi]
Resilience of Tampa Apartment Fundamentals
YardiMatrix reports that Tampa rents rose 0.1% to $1,280 on a trailing three-month basis through April, while the national rate remained flat. Across the metro area, Tampa areas continued to command the highest rates. Hyde Park/Davis Islands was the only submarket where average rents surpassed the $2,000 mark as of April. Despite COVID-19’s impact on the overall economy, YardiMatrix still projects that the Tampa MSA will see multifamily rent growth and expects the average rent to rise 2.6% in 2020.
The Opportunity
Lloyd Jones, LLC has extensive experience an investor, owner, and manager in the Florida multifamily market. We have worked with investors to find the right multifamily property to generate the best possible returns for four decades, through numerous economic cycles. If you are looking to capitalize on multifamily opportunities in the Tampa market, please let us know. To learn more, visit https://www.lloydjonesllc.com/
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i. https://www.businessobserverfl.com/article/tampa-bay-apartments-growth-jobs-in-migration-occupancy-rental-rates-brad-capas-cushman-and-wakefield-brian-alford-costar-group-arturo-pena-related-group
ii. https://tampabayedc.com/wp-content/uploads/2019/07/2019-2024-Hillsborough-County-Population-Growth.pdf
iii. https://www.bls.gov/eag/eag.fl_tampa_msa.htm#eag_fl_tampa_msa1.f.1
iv. https://multifamilyfirm.com/tampa-multifamily-real-estate-market/
v. https://www.mashvisor.com/invest/tampa-real-estate-market-report/
vi. https://www.pwc.com/us/en/industries/asset-wealth-management/real-estate/emerging-trends-in-real-estate.html