Tampa MutiFamily and Mixed Use Market Update | Bisnow Panel Discussion

Dear Reader,

It was a nice break from the office and a change of pace having a morning networking event. Bisnow a commercial real estate news outlet put on a great event in down town Tampa. The Tampa Multifamily and mixed use event was broken up with two panels the Multifamily and Affordable Housing Update and the Mixed Use and Construction Update panels. The Panels included experts in their respected fields to discuss the Tampa market trends and projection into the future dubbed the “Tampa multifamily & mixed use market update”.

Being in the development industry specifically in Engineering design we see the ins and outs of real estate renovations, acquisitions and land development working in many industries. We are in the initial phases of the developments starting with the Florida civil engineering land development and rezoning. Not being in one niche helps keep me in the mix of whats going on, since we range in construction of multifamily, single family, commercial, retail and airport development. Events such as this panel that show what others in the industry are experiencing is insightful to confirm whats trending in the market. This helps to be on the forefront of market trends leading to better designs on the projects that my Teams are working on.

My MultiFamily & Afforable Update Panel Notes

Moderator, Operations Manager of Insurance Company

1. Sports teams are helping with bringing people to Tampa 
2. 91% of projects are class A in Tampa
3. Bradenton, Westley chapel and other outskirts are receiving high rates of Urban sprawl due to property being affordable and up and coming
4. Indianapolis, Boise and other locations around the US might be next booming locations for real estate development

Housing and Community Development Director of Local Municipality

1. Development in Pinellas is hot along major roads for corridor developments
2. People are looking for authenticity and living down town with nice urban style projects
3. Density bonus that provides addition “penny for pinellas” to use county tax dollars to help leverage developers and investors
4. Affordable housing without zoning change taking place in St. Pete
5. New developers coming to the local market from outside states are interested in work force housing
6. Economic development proposition for affordable housing has been large.
7. Would likes to push back with stigma from other panelists for affordable housing density bonus on not having enough incentives 

EVP and CIO of Property Investment Company

1. Building low density is in demand and renters preference this
2. We need more workforce housing throughout the country but the challenge is the cost and municipalities need to wave more impact fees and bait taxes
3. Tampa is not going to stop because of the Florida lifestyle attractive place to live and raise a family. 
4. Urban sprawl is real People don’t mind moving an hour away
5. Demand for Class A is there and Class A is 91% of development because its the best option for the developer with high demand and highest ROI
6. I think the boom will continue to last and the city with become unaffordable to live in city like tampa for people who make good money
7. Currently projects include buying a property in Bradenton which is an affordable option in terms of location between Sarasota to St. Pete.. purchased because of the Urban sprawl is extending out

Senior Associate of National Real Estate Investment Company

1. Renters are preferring lower density
2. Finding projects closer to the urban core is getting harder to find
3. Supply chain greatly affected by COVID which is making the construction for development slower than previous years.
4. People moving to Tampa because it is still an affordable place to live compared to other places and a great place to live.
5. Forecasting cost of projects with the current market is the biggest problem at the moment
6. Currently, working on two development deals in Sarasota closing on a parcel of land to develop 400 units on US 19

Principle and Director of Design of a Architecture Firm

1. Authenticity effects the bottom line and amenities can help attract residence and raise rent prices. Tampa Multifamily and mixed use real estate developments have understood this and worked some great ammonites into the designs.
2. Middle market is more challenging and Class A projects and garden type stuff with parking garage first floor is exploding in popularity
3. Developers starting to move further out leading to more rezoning and making project have a 16 month instead of a 6 month process 
4. Working remote is helping with pricing out cities and moving developments further out
5. Working on projects in Sanford and Orlando and 4 city block mixed use office in defray beach 
6. Whether multi family or single family People want the amenities this has pushed a change in the Tampa multifamily and mixed use
7. Size of mail rooms keep having to be doubled in size due to the increase in deliveries. 
8. Refrigerated mail room for food is becoming more popular amenities that have been added to developments
9. Outdoor air fitness is becoming largely popular due to covid
10. Affordable housing tare not baited enough with tax benefits and other incentives so developers are moving more towards higher rate and higher quality projects that bring in more money
11. Long term effect of not having work force housing leads to a non livable city and people living in the outskirts of the city an hour from their jobs

Principle and Director of Design of a Architecture Firm (Cont.)

1. Affordable housing and pricing out developments with long commute times and rural area NIMBs. Need tax abatement to push affordable housing. In order to entice developers the local jurisdictions need to provide more tax credits or locals real-estate tax abatement.
2. Investment in renovation bringing a Class C property to Class B is quick and fast way to get into a development with keeping costs down.
3. From experience up north a mix of tenants with market rate and affordable housing has presented a challenge that the same sqft some people pay more than others causes conflict. Tampa Multifamily and mixed use Afforable housing incentives should consider this input to prevent conflict in residence.
4. Big question prior to jumping into a project is what will the exit market cap be? Equity seeking alpha, essentially what is the excess return of an investment above the market rate 
5. The Florida Brightline Rail is happening from Miami to Orlando and is going to happen from Orlando to Tampa. Will become the newest corridor in Florida. https://www.gobrightline.com/florida-expansion
6. Some current projects which he is working on include development of town homes and single family in Westley chapel and Fort Myers 
7. Asset classing developments is very important to keeping tenants even when its time to move. The Key is to have a seamless market for tenants to upgrade from a studio to a one bedroom then to a two bedroom. 
8. An emerging market in real estate is build to rent. Build to rent is single family homes built to rent not owned. Covid has pushed people to want their own front doors and out of apartments. 

My Mixed-Use & Construction Update Panel Notes

Director of Florida Real Estate and Land Developer

1. Current major project that he is working on is 52 acres in south tampa. Which was initially an industrial eye store. Though great vision the team created west shore marina district a mixed use community. One stop shop for residence to walk out the door to eat, shop then get on their boat.
2. Hired an amazing contractor, which helped smooth out the development during the construction phases. The 125 condo units ordered appliances and stored them in march to guarantee that they will be ready for construction. That means that the appliances where ordered a year and a half prior to when needed so that there wouldn’t be any delays. Pricing is always influx especially in this market and prices from distributers and manufactures are not locking in pricing. 
3. 5 to 6 more years on marina towers showing how long developments can take. 
4. There was an intent on purposely being selective on retail tenants. Really focused on walkability including commercial mostly hair, coffee, ice cream, nails for the local support of businesses. Not too focused on retail shopping or clothing boutiques. 

Director of Pre-Construction

1. Projects include multi family in Ybor, Tampa Bay and St. Pete regions which he predicts and increase to the current 130 people a day coming to the areas which is a 15% increase for next 10 years. Shear influx of residence will continue to drive growth. This is a conservative number per the moderators response. 
2. Co working space to work from home outside of the unit, package space and Insta cart, cold refrigeration storage for shipping
3. Efficiency of real estate developments are typically 70-80% depending on amenities and construction costs wood and steel prices. Q1 of this year material costs really started to drive up this number.
4. Contractors are starting to raise costs because many of them are trying to restore loses from getting burned during steep rise in materials costs
5. Worked on a adaptive reuse project for Norwegian crews lines last year along with projects all over including st. Pete beach and Miami 
6. Tech companies are going to continue to come here pushing the Tampa Multifamily and mixed use development higher for the continue increase of population. Tampa Bay Area has a lot of similarities to Miami and is even stealing population from South Florida.

Senior Associate of Engineering Company

1. Live work play is starting to blend in communities for the residences with places to work. Newer developments are using co-work spaces as a front line amenity.
2. Value engineering really helps developments become more successful.
3. Technology with building efficiency for construction costs and smart cities. Cities have used smart city for gathering data. Improve mobility from city. Private sector uses this data to under stand how to make parking more efficient with strategic layouts. Better designs help reduce construction costs with strategic locations of structural members and site planning.
4. Working on a few projects in Clearwater that they can’t talk about. 24 story project in St. Pete. More hospitality in the past 3 months in Orlando real Estate starting to come back.
5. People moving here to the Tampa Bay Area because of the demand of jobs and new companies moving to Florida though healthcare, military and etc
6. For smaller developments the residence anchor commercial aspects such as cafe. 
7. Retailers need to be much more creative with the experience and branding to attract guests and be competitive with e-commerce.

SVP of Real Estate Development Company

1. The trend which they are seeing is more mixed use, mix of housing types in one development and single family for rent, Garden styled multi family and less of retail shopping.
2. The amenities race is shifting focus from standard apartment tech to more service focused with 3rd party laundry mail services and fitness classes provided to residences.
3. Paid lots of money storing lumber to have it available during construction to keep timelines un restrained.
4. Cap rates on construction costs have been a struggle in the current market however, rent prices continue to rise making it worth while. 
5. Working on a mixed product of single family for rent with purchase and accusation of a community in Brandon and other locations. 
6. People putting a lot of thought on where they are moving and new numbers of residences are here to stay.
7. Opinion is that the infrastructure in tampa is not great and the city and county need to work on these things mostly focused on transportation.

Managing Principle Architect at Architectural Firm

1. Migration leading to sun belt states doing really well and communities redefining them selves 
2. New amenities in down town areas, creating new opportunities and amenities influx capital into development keeping cash in the community 
3. Curated services like standard lobby and space and fluxing hospitality into itCurated lobby with bista, smoothie bar then lounge. Making deals with 3rd party local companies to change the scene of the time of day. Fitness outside
4. Retail foot print getting smaller and embracing e-commerce and medical coming in with telemed 
5. About to renovate tampa convention center and addition to riverwalk and partnered on marina point
6. Doing a number of value add with conversion from hotel to apartment housing. Matter of getting information flowing quickly is the biggest challenge.  
7. Extremely busy, some activities with horizontal ventures in st. Pete with arts community. Look at creative village in Orlando is parallel geared towers tech company’s, just finished EA sports head courters. Boutique hotel mixed use residential and office tower all in Orlando church street etc etc 
8. Tampa Central business, Clearwater hospitality, St. Pete Housing
9. These locations downtown have great opportunity to start pushing toward other types of industries 
10. In a dichotomy retail has not recovered like other industries and forecasted that many malls will vacant. Business being creative with down sizing work space. Tampa has opportunity to reinvent development  

Summery

Tampa Multifamily and mixed use is very hot with lots of inquiries about mixed use and multifamily civil engineering leading to the futures of the construction industry to continue booming. Construction costs have been on the rise with materials prices pushing market rates higher. The affordable housing incentives are not as attractive as developers wish them to be so development has been focused on higher leading to higher returns. Amenities are changing due to covid more are wanting to be outdoors, have 3rd party services provided and have more room for deliveries.

I hope that you enjoyed my notes from the event and hope that they help you in your developments or understanding of the market here in the Tampa Bay Area. If you have any comments or questions I look forward to hearing them. Additionally if you’d like to discuss Florida civil engineering land development and rezoning, you can reach me at 813-444-7037 or ahoffman@advanced-engineers.com

Sincerely,

Alexander Hoffman E.I.