The Tampa Bay multifamily market has been making waves in the real estate sector, positioning itself as a leading contender in Florida's competitive landscape. Over the trailing 12-month period, Tampa Bay recorded an impressive $2 billion in total sales volume, leading the state and outpacing markets like Fort Myers, which saw $1.4 billion. Nationally, Tampa Bay ranks among the top Sun Belt markets, trailing only Atlanta and Phoenix, which recorded $5.3 billion and $4.4 billion in sales, respectively.
The Surge in Sales Volume
A significant portion of Tampa Bay’s sales volume was achieved in the second quarter of this year, with over $725 million in transactions—a stark contrast to the first quarter, which saw less than $145 million in sales. This surge has caught the attention of market participants, who are now optimistic about the region's transaction velocity.
One of the key drivers of this momentum is the substantial trades in the market, with three sales exceeding $100 million over the past year. These transactions alone account for nearly 20% of Tampa Bay’s total sales volume, highlighting the market's attractiveness to large-scale investors.
Key Transactions and Market Trends
Among the notable transactions, the $144.5 million acquisition of Lantana and Sage at Cypress Cay stands out. Sold by RangeWater Real Estate, these 4-star properties were acquired by a partnership between Argyle Real Estate Partners and Sembler Investments. Located near the University of South Florida, these properties, less than two years old, traded at approximately $250,000 per unit—slightly above the market average of $225,000 per unit.
In more centrally located areas, such as South Tampa and Hyde Park, properties have traded at a significant premium. For instance, American Landmark, a locally based investment firm, purchased The Pointe on Westshore for just over $300,000 per unit at a 5.5% capitalization rate. This property, completed in 2021, was 92% occupied at the time of sale, with an average monthly rent of $2,750—a nearly $1,000 premium over the market average. Such transactions highlight the strong demand for high-quality, well-located assets in the Tampa Bay market.
On the other hand, older properties like The Drake at St Pete, a 12-year-old 3-star property in south Pinellas County, have traded at lower prices. The Drake sold for $130,000 per unit, and the buyer, Maryland-based Excelsa, plans to invest $8 million in capital improvements—roughly $16,500 per unit. With 95% occupancy at the time of sale and a below-market average rent of $1,570 per month, this property represents a value-add opportunity for investors looking to capitalize on improving assets.
Market Stability and Future Prospects
Market participants are encouraged by the recent uptick in transaction activity, with the momentum from the second quarter carrying into the third. As of now, Tampa Bay has already recorded $465 million in multifamily trades, with several weeks remaining before the quarter closes. This continued activity suggests that investor confidence in the Tampa Bay market remains strong.
Despite the surge in sales, market pricing has plateaued, averaging around $225,000 per unit over the past six months. While this is a decrease from the peak of $270,000 per unit recorded in the second quarter of 2022, it represents a stabilization after a period of decline. The current trends offer a welcome reprieve from the seven consecutive quarters of value decline following the 2022 peak.
For investors, the Tampa Bay multifamily market presents a compelling opportunity. The region's strong transaction activity and stabilizing prices suggest that Tampa Bay is well-positioned for continued growth. Investors should keep a close eye on this market, as the combination of high demand, strategic transactions, and a resilient economy makes Tampa Bay one of the most promising markets in Florida and the broader Sun Belt region.
In conclusion, as Tampa Bay continues to assert itself as a leader in Florida's multifamily market, investors should consider the region's robust transaction volume, key property trades, and stabilizing prices as indicators of a healthy and vibrant market poised for future success.
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