Spring 2008 Executive Summary - Part III

Today we present Part III of our Spring Executive Summary where we take a look at the development outlook for 2008 for the Tampa Bay area. Enjoy!

The Tampa Bay market both geographically and financially is creating new areas of growth for the multi-family housing industry. Three particular submarkets sum up the majority of the new activity:

• Hillsborough County is experiencing above-average growth in Brandon and the Westshore/Westchase/Wesley Chapel districts of Tampa. The continued current growth of Brandon, which has been going on for some time now, saw more high-end product come online in 2007, and the same will be said for 2008 with several projects near completion. Continued construction on multiple projects will inject more A and high B product into the area to support the continued influx of middle and upper middle class economies. The Westshore/Westchase districts, like Brandon, house many current to near complete projects. Yet more projects will break ground in 2008 as competition for housing the growing urban professional intensifies. Already five new developments are scheduled to either break ground or begin opening ‘Phase I’ type units in ’08.

• In Pasco County, a mini-migration out of Hillsborough and Pinellas Counties has created an influx of new families that need infrastructure support. Thus new malls, new housing developments and job creation indicate that Pasco is a prime location for new apartment development. On top of the easy proximity to Clearwater via US 19, and Tampa proper via the Suncoast Parkway, as well as accessibility to I-75, Pasco is a development dream. The growing economy, land availability and the need for new housing choices, makes Pasco County an attractive market.

• Polk and Manatee Counties are the wildcards of the group with serious growth potential yet there is limited activity in the new construction pipeline. With urban and rural expansion increasing along the I-4 corridor, it would stand to reason that there is a high potential for growth. However there is little to moderate growth projection in these areas. Lakeland is the preferred destination for build-up with several projects ready to break ground or expand. Manatee County will continue to attract expansion projects into 2008 as activity grows along the I-75 corridor. This is consistent with the continued push of Tampa Bay metro growing into the outlying areas as land becomes more and more scarce..

Taking this snapshot then, combined with leading indices from other submarkets, we see two main trends for 2008. The first is continued growth towards the outlying areas of the metro area. The second trend, is the increase in A and high B product exposure in the Westshore/Westchase/Wesley Chapel districts. This increase in urban living appeals to the urban and peri-urban professional who would like to live closer to the city for the purposes of work, personal economies, the environment and creating community.
While growth is projected for 2008 and beyond for these submarkets, specific economic factors will have their say in the success of these developments. While the success of the pre-condo market allowed multi-family communities to flourish, the environment created by the re-introduction of these single-family housing and condos as rentals has now taken away that edge.
Innovation in multi-family housing is another subject that few can argue is not essential to the industry. The easiest and most effective way to innovate the industry, and thereby differentiating apartment dwelling from housing and condo dwelling, is through the very features and amenities the multi-family housing industry provides. New technologies, community building and lowering environmental waste will attract new renters in 2008 and beyond.