Market Snapshot – Q1 2017 Tampa Multi-family Real Estate Report

Multifamily Commercial Building TampaEmployment numbers have been rising steadily in the Tampa area. The regional economy is stable with signs that job growth is sustainable, lifting demand for housing in a market already under pressure due to limited inventory of available multiple housing units. Delivery of newly completed multifamily real estate has accelerated to its highest level since 2002, but market absorption has also kept pace just enough to keep vacancy rates at lower levels.

Price Trends in Tampa Multifamily Real Estate

Price trends for multifamily properties in the Tampa area is a mixed bag. The metro area numbers indicated a 3.0 percent increase in asking price per unit compared to the prior quarter. However, based on year-over-year numbers, the median of $70,454.15 per unit represented a 12.5 percent increase. Looking at the numbers for multifamily properties within city limits, the median asking price declined by 2.7 percent comparing quarterly figures, which was still higher by 4.0 percent at $62,259.23, comparing year-over-year figures.

On a county-wide basis, asking price for multifamily units was flat according to current market trend data. The median asking price of $58,361.12 per unit of multifamily property available for sale was about the same as the prior quarter, but this figure was higher by 9.9 percent based on a year-over-year comparison. The mixed trend in the price movements for multifamily developments is an indicator of the diversity of the area’s neighborhoods as well as differentiation in the property types available for sale. For multifamily properties categorized as Class B or Class C, demand remains strong among investors due to the underlying strength of the rental market as Tampa’s economy is in growth mode. Additionally, the median asking price for Tampa multifamily developments was significantly lower than the state average of $92,396.15, indicating niche opportunities for those interested in investing in multifamily real estate. In terms of total dollar value of multifamily properties for sale in Tampa, the latest data points to a 3.2 percent decline when current figures are compared to the previous quarter’s numbers but a drop of 13.9 percent, comparing year-over-year numbers.

Supply Trends

In terms of total dollar value of multifamily real estate in the Tampa metro area, the figures show a decrease of 3.2 percent comparing quarterly numbers. Looking at year-over-year reports, the total dollar value of multifamily properties available for sale dropped by 13.9 percent. Reflecting this trend, the total number of listings for multifamily properties for sale decreased by 6.2 percent, comparing quarterly numbers or 7.1 percent based on a comparison of year-over-year figures. Inventory will be boosted by a new developments entering the pipeline, many of which are located near the downtown core that is currently the center of revitalization efforts.

Demand for Tampa Bay’s Multifamily Properties

Gauging demand based on profile views of multifamily properties for sale, it appears that Tampa metro area real estate eased a bit by 1.5 percent when current quarterly numbers are compared to the prior quarter. However, comparing year-over-year figures showed a 5.9 increase in profile views. The number of listings of multifamily for sale in the Tampa metro area decreased by 0.3 percent on a comparison of quarterly numbers. Using year-over-year figures, multifamily listings dropped by 8.2 percent.

These numbers show that the multifamily sector will remain solid with sustainable growth in pricing as the regional economy heats up and employment opportunities expand. Population growth, a strong jobs market and urbanization will support supply-demand fundamentals, creating interesting opportunities for investing in multifamily real estate in the Tampa area.

Market Snapshot – Q1 2017 Tampa Retail Commercial Real Estate Report

retail neighborhoodThe retail sector is facing major upheavals with large department stores and other big box formats realigning their operations to survive and remain competitive. Tampa Bay area’s commercial real estate sector is seeing the impact of these retail industry trends. Fortunately, the regional economy remains strong in general, and the market is capable of adjusting and absorbing the shifts in retail user strategies especially where commercial properties retain a diverse tenant mix.

There are a number of trends that may have a huge impact on the Tampa retail commercial real estate market. There is a trend toward smaller developments that may be anchored by a grocery or an entertainment venue. This trend is bolstered by the growing preference for mixed-use developments that may include office, health care facilities and residential complexes. Additionally, online retailing is challenging brick-and-mortar operations and possibly contributing to a decline in number of stores open. However, industry experts also point out that as online retailers ramp up their services, there is a need for “last-mile” facilities that can process and fulfill same-day deliveries of orders placed online.

Pricing Trends for Tampa Retail Commercial Real Estate

The median price for commercial retail spaces in the first quarter of 2017 was placed at $178.50 per square foot for sites within city limits. This figure represents an increase of 3.2 percent compared to the prior quarter and a 2.7 percent increase on a year-over-year basis. For the entire Tampa DMA, the median asking price for retail properties was $143.72 per square foot, which is still much lower than the statewide median of $163.26. In comparative terms, the Metro area median asking prices delivered a slight increase of 0.6 percent on a quarterly analysis, and a drop of 5.8 percent year-over-year. The mixed results may be partly due to pressure exerted by additional inventory as completed projects are added to available inventory.

Inventory and Demand for Retail Properties

In dollar value terms, retail spaces for sale declined by 2.6 percent compared to the values from the previous quarter. On an annual basis, the value of retail real estate for sale dropped by 13.6 percent. Looking at the number of for-sale listings classified as retail real estate, the Tampa Bay area showed a 4.4 percent increase from the previous three months although this level represents a drop of 3.4 percent, comparing year-over-year numbers. The number of profile views of available listings is an indicator of demand, and for Tampa Bay, demand rose by 13.6 percent as a quarterly change or 18.8 percent on year-over-year comparison. These numbers indicate that the demand for Tampa retail commercial real estate remains strong even as large retail operations appear to be retreating. Measured as square footage available for sale, retail properties saw a subtle rise of 0.8 percent compare to the previous quarter, yet these numbers are still much lower by 8.5 percent compared to the previous year.

Leasable Retail Real Estate Trends

Median rental rates for retail properties in Tampa was placed at $15.78 per square foot, which is about equal to the statewide median. In Tampa, this rate represents a drop of 0.2 percent compared to the last quarter of 2016 although it is still higher by 4.9 percent compared to the year-over-year numbers. Viewing the same numbers for the Tampa Bay metro region shows similar indications. At a median rental rate of $14.09 per square foot, lease rates for retail spaces rose 0.8 percent comparing quarterly numbers and $4.8 percent comparing annual figures.
The Tampa area saw a 4.2 percent increase in the total number of spaces for lease on a quarterly basis, which was about the same change at 4.0 percent year-over-year. Looking at total square footage, the Tampa retail real estate subsector showed an increase of 4.0 percent increase comparing quarterly numbers and 22.0 percent comparing year-over-year figures.

Demand for Retail Real Estate

Profile views for retail properties offered for lease declined significantly in the first quarter of 2017. Compared to the fourth quarter of 2016, profile views dropped by 44.7 percent and 39.4 percent comparing year-over-year numbers. This is consistent with expectations of a decline in demand for retail real estate due to contractions in the retail sector that included closing low-performing stores and shuttering entire chains.

Market Snapshot – Q1 2017 Tampa Industrial Real Estate

industrial Tampa real estateTampa’s regional economy remained solid entering 2017 as various companies added jobs while the area remained one of the most affordable in the U.S. It ranks second most affordable among the large metro areas in Florida. It ranks prominently in the top 20 metro regions for economic growth, confirming that gains experienced in the last few years are sustainable and will continue to be so in the near future.

The Tampa Bay area is also one of the most active emerging markets for industrial real estate according to a recent industry report. In a listing of hottest industrial markets, Tampa industrial commercial real estate ranked 10th in terms of total value of net leases, which is up significantly up from its 28th place ranking in the previous year. A real estate market this dynamic can mean major changes for property owners, buyers, existing tenants and potential lessees.

Trends in Tampa Industrial Commercial Real Estate Prices

In the first quarter of 2017, the median asking price for industrial space in Tampa Bay increased by 3.0 percent based on per-square-foot price comparisons from three months prior. This is significantly higher than statewide numbers for this sector, which showed an improvement of 1.4 percent for the same period. On a year-over-year basis, median prices for Tampa Metro industrial properties rose 11.5 percent for the quarter. For a better perspective, consider price differentiation in the sprawling Tampa area: Median price for inner city sites were recorded at $77.86 per square foot, county-wide prices were placed at $73.67 and $68.25 for the entire Tampa Metro area, which includes Hillsborough, Pinellas and Pasco counties.

Demand for Tampa Industrial Real Estate

The critical factors bolstering the industrial market include Tampa’s location along the busy Interstate 4 and Interstate 75 corridors, the opening of Amazon’s massive campuses and major upgrades in the Port of Tampa facilities. Supply of industrial space for sale dropped 1.3 percent compared to the previous quarter or 8.2 percent compared to year-over-year dollar-value figures. In terms of number of listings for industrial properties for sale, the Tampa Metro area saw a 1 percent increase compared to the most recent quarter although the change represented a drop of 12.1 percent based on year-over-year numbers.

Adding pressure to a red-hot market, interest in this sector rose by 29.5 percent as measured by the number of profile views of industrial property listings in the first quarter of 2017 compared to the previous quarter. On a year-over-year basis, demand jumped by 47.4 percent when measured by the number of profile views.

Industrial Property Leasing in Tampa

Rental rates for industrial space in the Tampa Metro area were definitely on the rise in the early part of 2017, and understandably so due to declining inventory of available properties. Rent per square foot increased 3.0 percent in the Tampa Metro area based on a quarterly comparison and 5.3 percent on a year-over-year comparison. Median rent for Tampa industrial commercial real estate was placed at $6.80 per square foot with inner city sites bringing in $7.16 per square foot. These figures are under the statewide median of $8.24 per square foot.

Available spaces for lease based on number of spaces available for lease dropped 3.1 percent based on quarterly comparisons or 5.3 percent based on annual figures. However, in terms of square footage available for lease, the industrial sector saw a slight rise of 4.5 percent more than the previous quarter. Nonetheless, square footage available for lease was still 7.6 percent lower on a year-over-year basis.

Net absorption, the change in volume of occupied space in a defined time period, was strong for both leasable industrial space and properties for sale. The market absorbed 1,002,587 square feet of industrial space with vacancy for this sector recorded at 6.1 percent. Spaces that are at least 40,000 to 80,000 square foot saw the most demand especially in the eastern section of the county. Businesses involved in construction, construction-related activities and third party logistics were among the most active lessees.

Carrollwood Housing Market Snapshot – April 2017

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Palm Harbor Housing Market Snapshot – April 2017

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Tarpon Springs Housing Market Snapshot – April 2017

Free Tarpon Springs April 2017 Housing Market ReportFresh off the press! Get your Tarpon Springs Housing Market Snapshot report for April 2017 now! This report provides insights into the Tarpon Springs housing market, what’s selling, and trends on average selling price, days on the market and if the market is a buyer or seller’s market.

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Free Download – 2017 Ultimate Guide to Buying a Home

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Market Snapshot – Tampa Industrial Real Estate Q4 2016

The Tampa area has a diverse economic base with distribution and logistics companies playing a key role in the area’s growth. The Tampa MSA has its share of manufacturing, trade and transportation companies. Although few are massive operations, these companies have driven the growth of industrial real estate in Tampa and the nearby Pinellas, Pasco and various parts of Hillsborough County.

Industrial Real Estate Price Trends

In the fourth quarter of 2016, the median asking price for industrial industrial real estate rose by 4.2 percent compared to the previous quarter. On a year-to-year basis, median asking prices improved by 8.9 percent for properties within the city boundaries. The figures for Hillsborough County mirror this trend with median prices improving by 4.4 percent based on quarterly comparisons and 9.8 percent on year-to-year comparisons. These figures are higher than statewide numbers for median asking prices for industrial properties.

The number of listings for industrial real assets increased by 1 percent in the fourth quarter of 2016 compared to the third quarter. The trend has been flat for most of 2016 with available for-sale listings of this property type showing no significant changes. However, a year-over-year comparison shows a 12 percent drop in the number of listings for industrial properties.

Interest in Industrial Properties

Industrial real estate investing was clearly on the uptick for most of 2016 but notably in the last quarter. A quarterly comparison of the figures for number of profile views showed an increase of 29.5 percent. A year-over-year comparison of these figures show a significant boost in interest, which was recorded at 47.4 percent. This figure is much higher than 2014 figures, indicating a very strong demand for industrial properties the Tampa-St. Petersburg-Clearwater area.

Sales and Lease Trends for Industrial Properties

In terms of total square footage available for sale for industrial properties, the figures were steady for most of 2016 after declining sharply in the first part of the year. On a quarterly basis, total square footage increased slightly by 0.8 percent, indicating a decline of 8.5 percent on a year-over-year comparison. This is a clear indicator of limited availability, which would drive prices up for those interested in industrial real estate investing whether on both seller and buyer sides.

Not surprisingly, industrial properties for lease showed a definite upward trend for most of 2016. In the fourth quarter, rent rates for this property type improved by 3 percent based on a quarterly comparison or 0.8 percent on a year-over-year basis. As of June 16, the rate was $7.16 per square foot. In terms of number of spaces for rent, the changes were not significant on quarterly and yearly comparisons. Number of industrial spaces for lease rose by 3.1 percent on previous quarter comparisons and declined by 5.3 percent on year-over-year comparisons.

Market Snapshot – Tampa Multifamily Real Estate Q4 2016

Leading indicators in the Tampa Bay area indicate that this region continues to be a bright light in Florida’s economy. The unemployment rate in the Tampa Metropolitan Statistical Area trended downward as job opportunities expanded with the entry of new businesses or the expansion of existing ones. Growth of employment opportunities may be attributed to the availability of highly skilled workers, a positive business environment and the presence of high-technology infrastructure, all of which are present in Tampa. A growing and mobile population drives demand for multifamily housing.

Multifamily Real Estate Sales Trends

The latest figures available for Tampa show that the asking price for multifamily properties for sale declined by 2.7 percent compared to figures from the previous quarter. However, prices were up by 4 percent when compared to year-over-year numbers. For the metro area, the median price was placed $62,259.23, which is much lower than the statewide median asking price of $92,396.15 per unit of multifamily properties.

Total value of multifamily properties available for sale during this period was at its lowest point even dating back to 2014. On a year-over-year basis, total value of multifamily inventory for sale dropped by 13.9 percent although the decline was only 3.2 percent on a quarterly comparison. In a similar vein, the number of multifamily listings dropped by 7.1 percent on a year-over-year comparison or 6.2 percent vis-à-vis the previous quarter. These trends do not bode well for investing in multifamily real estate because they indicate the dearth of optimal buying opportunities. However, Tampa being a dynamic market, there are opportunities to be had anytime especially with insider information from local experts.

Demand for Tampa Multifamily Properties

In terms of market demand for multifamily properties for sale, 2016 was a stellar year based on the number of property profile views. A sharp increase in the beginning of the year was mitigated by a midyear correction. Profile views decreased by 1.5 percent compared to the previous quarter but rose by 5.9 percent on a year-over-year bais. The number of multifamily units for sale showed a downtrend of 0.3 percent compared to the previous quarter. Year-over-year, the drop in multifamily units for sale was significant at 8.2 percent.

Multifamily real estate investing in the Tampa Bay area requires a strategic review of opportunities in light of various factors. Developers remained committed to the area with deliveries of completed projects spiking toward year-end, increasing inventories and inflating vacancy rates. New developments are located close to the downtown cores of Tampa and St. Petersburg, which are notable for better walkability.

Investors can see that the demand for multifamily housing in Tampa is driven by millennials drawn to the area by employment opportunities, lower cost of living and the attraction of year-round pleasant weather. However, multifamily properties are also attracting empty-nesters and retirees, and a number of these properties are being eyed for conversion to active-adult retirement communities. In addition, purchasing existing multifamily developments provides a more efficient access to these investment opportunities as refurbishing costs less than new construction. Equity enhancement is built in for those investing in multifamily real estate who have the resources to upgrade Class C properties in preferred locations.

 

Market Snapshot – Tampa Office Real Estate Q3 2016

tampa-office-buildingAll types of Tampa real estate showed sustained growth in the third quarter of 2016, and office real estate was no exception. The total inventory of office properties in the Tampa Bay area was 65,768,644 square feet, large section of which are located in the Westshore area, along the I-75 corridor and the Central Business District. New construction projects are underway, but there were no new deliveries in the third quarter creating an upward pressure on rental rates.

Tampa Office Real Estate for Sale by the Numbers

The price of office properties for sale in Tampa Bay increased by 5.1 percent based on year-over-year numbers and 4.3 percent compared to the previous three-month period. At a per square foot price of $152.99, office properties in Tampa’s downtown cluster showed real strength with median sale prices set at a premium compared to median sale prices in all of Florida. The statewide median price was placed at $143.27 per square foot.

The dollar value of office real estate for sale increased by 3.9 percent compared to the previous quarter and 6.3 percent based on year-over year figures. Looking at the number of listings for office real estate offered for sale in the area showed a decline in the number of listings for the third quarter. Based on year-over-year figures, the number of office listings for sale declined by 13.9 percent or 3.8 percent when viewed alongside figures from the last quarter.

Higher asking prices and an increase in the dollar value of office properties available for sale indicate strong demand and tighter inventory of available office properties, two factors that typically indicate positive outcomes for investing in Tampa office real estate. The index of profile views bear this out with a 35.6 percent increase in views by potential buyers on a year-over- year basis. Compared to figures from the previous three months, the number of profile views increased by 12.8 percent.

Tampa Office Properties for Rent

In Tampa, the average lease rate per square foot in the third quarter of 2016 was placed at $19.84, representing an increase of 4.2 percent compared to figures from the same period last year and 1.1 percent compared to average rent for the prior quarter. At this rental rate, Tampa properties are higher than statewide rents per square foot of $17.63.

The total number of spaces for lease dropped 3.6 percent year-over-year although this represents a small differential compared to the prior three months. Profile views of leasable office space dropped dramatically in the third quarter of 2016 at 40.2 percent compared to the same period last year and 45.7 percent compared to the prior three months’ figures. This number suggests a waning interest in Tampa’s office real estate portfolio possibly due to higher rent rates compared to nearby business districts that offer similar amenities. Inventory of leasable office properties dropped 7.8 percent year-over-year or 3 percent compared to the prior three months.

Investing in Tampa office real estate sector appears to be a winning strategy for the foreseeable future with current trends favoring the property owners’ side. This area remains a landlord’s market here fewer concessions are offered and longer-term leases are encouraged. The vacancy rate for Tampa office real estate in 3Q was 12.8 percent with net absorption of 92,561 square feet. About 11,000 square feet of new office space will be added to the pool when current construction projects are completed.