Close-Up on Florida Multifamily from Camden Property Trust
- Sep 22, 2021
Florida continues to act as a magnet for New York City and California companies looking to relocate to more business-friendly markets. This in-migration of employers sustains a steady flow of residents, a combination that has accelerated the recovery of the state’s multifamily fundamentals.
Property owners and operators in Florida are looking at a great year, Camden Property Trust’s Regional Vice President Ed Malone told Multi-Housing News.
In this interview, Malone, one of the industry’s veterans in the state who has been active in the local multifamily market for more than four decades, provides an analysis of Florida’s multifamily market since the onset of the health crisis.
How has Camden’s Florida portfolio performed over the past years?
Malone: Camden operates 25 communities with more than 9,000 apartment homes in our Florida portfolio and we are nearly 98 percent occupied. Despite a steady flow of new supply over the past few years, demand for apartment homes has clearly exceeded our expectations and allowed for significant absorption of those new units, as well as strong growth in occupancy and rental rates for our existing assets.
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Which parts of the state have posted the best performance since April 2020 throughout your portfolio?
Malone: Clearly, our revenue growth was muted in 2020, given the pandemic. But Tampa has consistently been the leader of our Florida markets with a 2.0 percent increase recorded in 2020, compared to relatively flat results for Orlando and South Florida.
For the first half of 2021, all our Florida markets met or exceeded Camden’s overall same-property year-over-year portfolio revenue growth of 1.9 percent, with Tampa posting 6.5 percent, followed by South Florida at 4.3 percent and Orlando at 1.9 percent.
Which factors contribute to Florida’s magnetism? How can its multifamily market be improved?
Malone: Florida has consistently attracted residents moving south for better weather, housing affordability and lower income tax rates. The quality of life and affordability remain Florida’s top attractions for individual relocations, but companies are also recognizing the benefits for them and their workforce.
Corporate relocations and expansions have translated into a more diverse job base in Florida, and education/university growth is also at an all-time high: The University of Florida, Central Florida and the University of South Florida all rank in the top 10 for in-state university enrollment in the country. Major investments in infrastructure for airports and high-speed rail are other examples of Florida’s investments for future growth.
How has the health crisis affected rent collection?
Malone: In the early part of the pandemic, rent collections in South Florida lagged the overall portfolio due to the region’s strong ties to tourism, retail and travel, which all suffered from the state’s mandatory shutdowns and shelter-in-place initiatives. Today, rent collections are quite good in all our Florida markets and are relatively in line with long-term trends.
What about leasing activity?
Malone: Leasing activity has been very strong in all our Florida markets for the past several quarters, and at this point, we have very few units available to lease. Camden has focused on providing an easy, virtual platform for prospective residents to search for apartments.
With our new technologies, prospective residents can shop for an apartment, generate a quote, visit the community and tour available units at their convenience (without us being present), complete an application, sign a lease, and even move in using their phone or personal device.
Tampa has been among the top performers in rent growth. What’s driving performance here?
Malone: Tampa traditionally has had less reliance on tourism, retail and travel, so it was a bit more insulated from the pandemic than Orlando or South Florida. The city is undergoing major revitalization and infrastructure work including development along the Riverfront and Marina District.
Tampa’s positive press has also benefited from a well-known investor, Jeffrey Vinik (owner of the Tampa Bay Lightning and Strategic Partners), and his commitment to improving Tampa’s profile has created a very pro-growth atmosphere both from a business and residential standpoint.
Several companies have traded New York City and Silicon Valley for South Florida in the past 15 months. How is this impacting the multifamily market?
Malone: We have definitely seen an uptick in new residents moving to Camden’s Florida communities from either New York or California. While Florida has consistently attracted residents from those states, it is likely that the post-pandemic environment—which allows more flexibility in work-from-home situations—has benefited the multifamily market.
Camden has a strong presence across the state, except for Jacksonville. Why is that? Are there plans to add north Florida to Camden’s property map?
Malone: We do not plan on entering the Jacksonville or North Florida market at this time. Camden’s strategy is to operate in large, high-growth markets across the U.S. that demonstrate strong levels of job and population growth, household formation and overall in-migration. While Jacksonville does screen well on some of those metrics, we have chosen to focus on other new markets, such as Nashville, Tenn., this year.
Please tell us more about Camden’s sustainability/ESG principles and their impact on the company’s investments.
Malone: Camden is committed to creating long-term value for our stakeholders and integrating sustainable practices into all aspects of our business. We strive to improve the energy efficiency of our existing assets, and we also seek to invest in green, eco-friendly properties through our development, acquisition and renovation/repositioning programs.