Rapid Job Gains Reshape Tampa
Solid fundamentals and above-trend employment growth spur demand for multifamily product across the metro, leading to significant rent increases. Transaction volume is also robust, while deliveries are expected to hit a cycle peak by the end of the year.
By Robert Demeter
Tampa rent evolution, click to enlarge
Above-trend job growth continues to put the Tampa-St. Petersburg metro in the spotlight as a prime coastal market, both in Florida and nationally. Solid fundamentals and a diverse economy fuel Tampa Bay’s multifamily sector, with the region producing strong rent gains. Investor interest is robust, and deliveries could hit a cycle peak this year. At $1,149 as of August, rents are poised to rise, along with occupancy rates, driven by the area’s steadily expanding population.
Central Florida markets—including Tampa, Orlando and Jacksonville—are among the top metros leading U.S. job growth, with Tampa adding 48,700 positions year-over-year through July. Professional and business services led gains by far, with 19,200 new jobs. Construction (6,900 positions); education and health services (6,600); and trade, transportation and utilities (4,000) also saw significant gains. Recently breaking ground, Water Street Tampa, one of the largest redevelopments in the city’s history, is expected to add to the already large workforce, beginning with the construction industry.
Signaling expansion within the construction sector, roughly 6,900 units were underway as of August. Investment activity is also on the rise: A soaring $1.3 billion in multifamily assets traded in the first seven months of 2017. Despite these trends, upcoming deliveries could dampen rent growth, at least in areas where development activity is high. Yardi Matrix expects rents to increase 3.8 percent in 2017.
