After decades of mild to lukewarm national interest, the Tampa Bay Area has earned a place among the top real estate markets in the U.S. in 2019.
The annual Emerging Trends in Real Estate survey by PwC and the Urban Land Institute ranked Tampa/St. Petersburg 10th in the country, marking a dramatic rise from the 35th place slot the area held in 2007, before the Great Recession.
“I have never before seen a city go from 30-something to the top-10 for all the right reasons,” Mitch Roschelle, a partner and business development leader at PwC, said during a presentation at last week’s
Urban Land Institute Tampa Bay Trends Conference. “The success story of Tampa is quite remarkable, but not surprising. Having the vision to take the waterfront and do something with it, to realize it’s an irreplaceable asset another city would die for, you have created a live, work, play downtown here that is the envy of other cities.”
The annual report pointed to growing interest among institutional investors, the increased construction activity in the wake of the recession, more vibrant downtown cores, migration from higher tax states, and an employment growth rate above the national average as signs of the area’s emerging muscle.
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Tampa Mayor Bob Buckhorn speaks about Tampa's ongoing resurgence at his last ULI Tampa Bay Trends Conference as Mayor.
Among local investors, the Tampa/St. Petersburg market had the second highest confidence level in the South, behind only Orlando, and ahead of metropolitan areas such as Washington D.C., Miami, and Jacksonville. That was based on local investors’ opinions on the local economy, investor demand, availability of capital, development and redevelopment opportunities, public-private partnerships, and the local development community overall.
While some economists are forecasting an economic slump in 2020, analysts and industry insiders who convened at Armature Works in Tampa Heights for the ULI conference predicted this region’s boom will have staying power.
Roschelle pointed out that, while the national economic expansion in the wake of the recession has been ongoing for nearly a decade, the Tampa Bay region’s expansion is still in its early stages and “has strong tailwinds behind it with people coming from high tax states.”
Buckhorn’s final ULI conference as mayor
In his final talk at the annual ULI Tampa Bay conference as Tampa mayor, a fired-up Bob Buckhorn, who leaves office in May after two terms, said the city has endured a “long journey from the depths of the recession” to a metropolitan area “competing on the national stage.” He noted that only last year did Tampa’s property tax revenues climb back to the level they were at in 2007, before the recession.
Meanwhile, Water Street Tampa, multiple downtown tower projects, Midtown Tampa, the Heights Union, and other transformative projects are still in the pipeline and the downtown riverfront is a hub of activity.
“We have fallen in love with our community again,” Buckhorn said. “There is a swagger about this city that never existed. … Over the next five to 10 years, if we continue on this path, you’re not going to recognize the place. We are going to become the city we aspired to be.”
St. Petersburg also going strong
Across the bay, St. Petersburg’s ongoing resurgence should only pick up steam with the new Pier under construction and multiple downtown tower projects on the drawing board.
One tower project generating interest and discussion is the 50-story tower New York-based Red Apple Group plans on the 400 block of Central Avenue.
Red Apple Group Executive Vice President Robert Zorn said company Chairman John Catsimatidis’ family ties to the area was one reason Red Apple selected St. Petersburg for its first project outside New York City.
But Zorn also pointed to the market’s opportunities, saying St. Pete is not overbuilt with condominiums, hotels or rental units.
“We see trends for continued growth and demand that have this area a little more protected from the cyclical nature of the Florida real estate market,” Zorn said.
The Red Apple Group’s plans include ground floor retail and restaurant space with outdoor seating and a high-end bar. Above that, the tower will include more than 300 condominium units and upscale Marriot Hotel.
Zorn said Red Apple wants its project to be a focal point linking the bar and restaurant district east on Central with the more arts-oriented stretch to the west.
Suburbia is still king
While much of the national attention Tampa Bay is generating among media and investors focuses on the transformation of Tampa and St. Pete’s downtowns, suburbia remains king, according to a report released at the ULI conference: The New Geography of Tampa Bay’s Urban and Suburban Neighborhoods. The study, conducted by RCLCO real estate advisors found that 84 percent of the region’s population and a large and growing number of its jobs remain in the suburbs.
But the report also found a faster pace of growth in urban areas and that urban areas have a significantly younger population than the suburbs -- with 27 percent of the households headed by someone under age 35, compared to 16 percent in the suburbs.
RCLCO Managing Director Gregg Logan, who co-authored the report with Senior Managing Director Adam Ducker, said they also found a growing interest in suburban areas for the type of mixed-use developments typically associated with urban areas.
“People are saying they want suburbs that function more like a city,” Logan said.