Redevelopment Efforts Aim To Change Tampa

04/10/2018

Tampa, Florida flew under the radar for years, but is now intentionally trying to reconstruct its image and expand their downtown. With a strong labor market, well-connected group of entrepreneurs (Tampapreneurs, as they are called), and increasing interest from developers and capital providers, the market appears well-positioned for future growth. Our Director of Economic Research, Ali Wolf, recently spent time in Tampa and left impressed by the redevelopment efforts.

The Tampa metro is currently the 18th largest in the US, behind markets like Detroit and Minneapolis. However, the tide may be turning for the market. The newly released data from the U.S. Census Bureau shows Tampa as the third best metro in the nation for net migration from 2016-2017. Within Tampa, Hillsborough County was the 11th best spot in the country for population growth from 2010-2016 for those aged 25-44 (Millennials + some Generation X).

Select counties in the Midwest saw the most out-migration, which coincidentally benefits Florida. According to research from The Ohio State University, Florida, Texas, and Kentucky are the top three outbound states for Ohio residents. In fact, Tampa plays up the lifestyle as it would appeal to some of their new residents – “We have all the amenities of major cities, with the community feel of smaller towns.”

 

WHY TAMPA?

Tampa is one of the markets that has something for everyone:

Relative affordability. On average, owning a home is cheaper than renting in the metro. The market average for a detached single-family new home is $270,000 and $185,000 for existing. If one is looking in the popular Hyde Park/Davis Island ZIP code, though, the price point approaches $800,000 for a new detached home and $700,000 for a resale.

Manageable traffic. Locals will still complain about the traffic, but compared to other metropolitan areas, Tampa has it easy. Tampa ranks 33rd for the worst traffic in the US; Los Angeles, New York, San Francisco, and Atlanta are the top markets for traffic. According to Redfin, Los Angeles, New York, and San Francisco all fall within the top 10 cities house hunting in Tampa.

Excellent weather 60% of the year. Tampa has seven months of beautiful weather and five months of hot temperatures. For comparison, Cleveland, one of the aforementioned markets contributing to Tampa’s growth, has four months of nice weather and four with the average temperature 45 degrees or lower.

Close to the water. Tampa residents have easy access to a slew of beaches either nearby in the Bay or along the Clearwater-St. Petersburg coast, setting it apart from nearby Orlando.

Professional sports teams. Tampa has as many professional sports teams as Orlando and Jacksonville combined, which is great for the nearly 60% of Americans that are sports fans. Locals can cheer on the Tampa Bay Lightning, Tampa Bay Rays, and the Tampa Bay Buccaneers.

Ability to serve the country. The MacDill Air Force Base, located just south of downtown Tampa on the peninsula, has been a critical component of the market since the 1940s.

Culture and history. Tampa’s Latin American influence permeates throughout Ybor City (great for cigar aficionados) and the food scene, adding authentic elements to parts of downtown.

Shops with soul. The Tampa Heights area is transforming thanks to two new food halls. The Hall On Franklin, provides a unique experience in the form of an upscale food court with sit-down service. A seven-minute walk away is the other, Heights Public Market (HPM). The 22,000-square-foot industrial market provides bars, restaurants, collaborative work space, a grocery store, a butcher, and more. HPM (photo from our visit below) serves as a base to further development in the area north of downtown.

 

 

THE GAME CHANGER? 

Strategic Property Partners, the developer of the Water Street Tampa downtown redevelopment plan, is controlled by Jeff Vinik, the owner of the Tampa Bay Lightning, and Bill Gates’ Cascade Investment Fund. Water Street Tampa is expected to breathe new life into the Channelside District. The revitalization project will include 53-acres of live-work-play space near the Lightning’s existing stadium. Upon completion, the walkable development will act as an anchor to the city. It is projected to include two new hotels, retail, public space, office space, bike paths, cultural amenities, entertainment venues, and housing (both for-sale and for-rent). The College of Medicine for the University of South Florida is also scheduled to open in 2019 at Water Street Tampa, further backing the region’s health care industry.

 

Source: Waterstreettampa.com

 

MIX OF URBAN LIFESTYLE AND BEDROOM COMMUNITIES 

Lennar’s acquisition of both CalAtlantic and WCI Communities helped it secure a solid foothold in Tampa.

  • Of the active builders in Hillsborough County, Lennar makes up over 30% market share.
  • Lennar contributes to the myriad of housing options in the market, ranging from townhome communities in the up-and-coming South Tampa area to single-family detached homes in the bedroom community of Lutz (pictures below).
  • Lennar has two of the top ten selling new home communities in Hillsborough County, both south of Brandon and with prices in the $200,000s.

D.R. Horton, who comprises 12% of Tampa’s market share, is successful in Tampa under their Express Homes line. The affordable homes are largely sprinkled along the Riverview to Sun City Center corridor and are priced between $166,000 to $226,000. The average monthly sales rate per community is 4.2.

 

 

West End II townhomes by Lennar starting at $390,000 for 2,100 square feet

 

The Promenade At Lake Park 50s by Lennar starting at $352,000 for 1,900 square feet

“Of the large metropolitan areas in the state of Florida, Tampa is one that is poised for significant growth due to its expansive waterfront amenities, exciting downtown redevelopment, excellent employment opportunities, and its housing affordability. Transportation infrastructure, including interstate and regional roadways, the international airport, and the Port of Tampa all contribute to Tampa’s bright future for economic development opportunities,” concludes Mike Timmerman, our Florida expert and Senior Vice President of Advisory.

Contact us to discuss how we can help you with your next project in Tampa.

Ali WolfDirector of Economic Research
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