Why Isn’t Tampa Apartment Development Booming?

It’s a bit of a head-scratcher as to why apartment development isn’t stronger in Tampa, according to Greg Willett, First Vice President, National Director, Institutional Property Advisors Research.

He said that the 12,000 or so apartments on the way in metro Tampa translate to a less aggressive near-term inventory growth pace of 4.4 percent.

IPA reported that today’s building volume in the area remains about in line with the levels registered in the late 2010s to early 2020, “so the market hasn’t experienced the acceleration of activity seen elsewhere,” Willett said.

Willett described Tampa as “a market positioned to benefit quite a bit from the state of Florida’s evolving workforce characteristics and shifting demographics.”

Its “work-from-home” attractiveness – not to mention the “more affordable waterfront alternative to the three Southeast Florida metros” – should draw additional young adults to the resident mix.

“That’s a big plus for the metro, given the median age of the current populace in metro Tampa is the oldest across the country’s largest markets,” Willett pointed out.

Florida Pipelines Reaching Soaring Totals

Apartment construction is soaring across Florida. Multifamily development pipelines in the largest metros have generally reached totals not seen in decades, and some smaller markets register unprecedented building activity in process, according to Willett’s IPA report.

With huge renter demand for apartments realized over the past couple of years, the state is starving for additional supply right now.

IPA reported that 88,500 apartments are now under construction across Florida’s six largest metros — Miami-Dade, Tampa-St. Petersburg, Orlando, Fort Lauderdale, Jacksonville and West Palm Beach. That total is up by a third from the volume of ongoing building activity recorded pre-pandemic in early 2020.

Getting Units Across the Finish Line

Willett tells GlobeSt.com that while the volume of apartment product under construction continues to climb nationally, developers still are struggling to get new properties across the finish line.

Deliveries have averaged about 80,000 units per quarter over the past few years.

“That volume doesn’t seem to be moving much, limited primarily by labor availability,” he said.

Colliers’ Aaron Jodka wrote earlier this month, that nationally, 870,000 multifamily units are under construction, and New York, which has the largest inventory in the country, currently has the most units under development.

For markets with at least 100,000 units of existing inventory, Nashville ranks first in percentage of inventory growth, according to Colliers.

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