Commercial Real Estate News / Investing / 2022 Multifamily Market Report: Tampa

2022 Multifamily Market Report: Tampa

Published: 06-13-22 Category: Investing

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

The Tampa multifamily market is extremely strong. In 2021, the Tampa market outperformed in the size of transactions, occupancy levels, and rent growth.

People are flocking to the Greater Tampa Bay region for more affordable housing and loose COVID-19 restrictions, which is driving up rent prices in the area.

Prior to 2021, the Tampa market had lower rents than the national average. As of 2021, the average asking rent in Tampa is now higher than the national average at $1,676 a month.

The Tampa Bay region is a popular and fun place to live. With large attractions such as the Clearwater Marine Aquarium, ZooTampa, and Busch Gardens, well-known employers such as Publix, McKinsey & Company, and Raymond James Financial, and stellar weather, it’s easy to see why people are moving to the area in large numbers.

Tampa Multifamily Market Highlights

The Tampa multifamily market report showed investors tremendous growth and opportunity.

Some important highlights include:

Tampa saw 83,700 new jobs added to the economy last year;
Average occupancy rate was 96.9%, which is up 130 points YOY;
Tampa reached a new decade record for apartment transactions, with $4.6 billion of transactions in 2021.

In addition, the Tampa area is seeing tremendous commercial growth and infrastructure development projects.

The recently constructed Midtown area has rejuvenated a once overlooked area of town, driving new commerce close to the Tampa Bay Buccaneers stadium.

The Pacing of Multifamily Rents in Tampa

In the United States, rents rose by 11.3%. Some areas experienced more growth than others.

For a one-bedroom apartment in Tampa, the costs grew from pre-pandemic prices in 2019 to 2021:

Citrus County from $640 in 2019 to $679 in 2021;
Hernando County from $916 in 2019 to $1,040 in 2021;
Hillsborough County from $916 in 2019 to $1,040 in 2021;
Manatee County from $925 in 2019 to $992 in 2021;
Pasco County from $916 in 2019 to $1,040 in 2021;
Pinellas County from $916 in 2019 to $1,040 in 2021.

The rent prices in Tampa in 2021 are misleading: The rent prices in 2022 are 22.4% higher YOY.

The median asking price for rent in the Tampa Bay area is $2,188, which is much higher than the national average.

Long-Term Changes in Rent

Over the long term, developers of affordable housing are needed to keep residents in the area.

While high-earning remote workers are flooding the area, this is pushing some long-time residents to move to more affordable states.

The current wages in Tampa cannot keep up with the increasing rents.

There are many opportunities for multifamily investors that are looking to fund more affordable multifamily units in Pasco, Pinellas, and Hillsborough counties.

Short-Term Changes in Rent

Rents in Tampa are increasing rapidly, making Tampa unaffordable for many families.

While people are moving to Tampa to enjoy the warm weather, fun things to do and relatively lower costs of living, the region is quickly changing to become more expensive for rent, groceries, utilities, and more.

Multifamily Sales in Tampa

Tampa, Florida is a strong and moving market for the multifamily sector. Some notable multifamily sales and acquisitions in Tampa over the last year include:

Notable Acquisitions So Far

In late 2021, 29th Street Capital acquired the Henley Tampa Palms and the Enclave at Northwood for $112 million.

29th Street Capital picked up an additional 503 units to add to their portfolio of nine (inclusive) acquisitions in Florida.

The firm paid record high rates for what are classified as “vintage” units.

Artistry, an apartment complex built in 2020 by Milhaus Development, was purchased from Milhaus by Avanti Residential for $92 million.

The sale was coordinated by Patrick Dufour and Andrew Visnick (Newmark), and funded by Freddie Mac with the help of Charlie Williams (Newmark).

In January 2022, Walton Street Capital Acquired and Stoneweg US purchased the Waterview Echelon.

The seller and the sale price were withheld. The complex had an impressive 99% occupancy at the time of the sale.

Being built in 2021, the apartments and complex have modern, upscale amenities.

Notable Sales So Far

In April 2022, Triwest Development purchased The Lakes at Collier Commons for $71 million with the help of Alan Soclof from the Rosewood Realty Group.

It was purchased from Primerica Group One who built the property in 2004.

The apartments are on the larger side, the amenities are relatively modern, and downtown is 30 minutes away.

NorthEnd Equities and Residential Management sold the 982-unit Reserve at Brandon to ZMR Capital for $207 million.

The deal was brokered by Cushman & Wakefield, and the facility is the second largest in terms of units in the area.

Market Forecast for the Rest of 2022

In 2023, the Tampa market will continue to see strong rent growth and multifamily investment opportunities.

The residential rental market in Tampa is an unsustainable bubble for renters due to the high demand for rental housing, loose COVID-19 restrictions, and a rapidly rising cost of living.

However, this is an opportunity for investors.

Short-term trends and economic indicators show that the demand for rental housing will continue to rise over the next three years. This will lead to increased rental prices.

General Investor Activity: Where is the most money flowing?

The Tampa multifamily market is attracting investors like never before.

The majority of investor activity is going towards single-family home and condo developments. Investors are also purchasing existing multifamily property and new construction from builders.

Takeaways for Multifamily Investors

The Tampa market is growing quickly, making it a great investment opportunity to consider.

Return on investment in the Tampa region is expected to be higher than the national average, due to how strong the region is growing and its incoming growth.

Multifamily investors looking for deals can take advantage of short-term trends that show continued rent increases over the next few years.