GlobeSt.com UPDATE: Tampa Apartment Market Remains Strong

Completed new apartments last year total 6,469 but only 2,720 units were rented. In the fourth quarter, a scant 660 units were rented. Average occupancy dropped 1.9 percentage points to 93.6%.

But those dismal numbers don't faze M/PF Research Director Gregg Willett, largely because Tampa was still adding renters in late 2001 while other major metro centers were either stagnant or losing tenants.

"Tampa Bay still is producing new jobs at an enviable pace," Willett tells GlobeSt.com. That translates to new household formations while "renters in numerous metros with weaker economies exhibit an increasing tendency to double up into roommate households or move in with relatives."

Citing federal Bureau of Labor statistics, the researcher finds Tampa's job base grew by 3.3% in 2001 to 40,300 jobs. "The percentage growth was the strongest anywhere in the nation," Willett says.

Monthly rents in metropolitan Tampa average $690 versus an average $839 in area communities built over the last 10 years. Ongoing construction totals 7,077 units of the first January. North Pinellas County has 1,110 units under way; Intown Tampa, 1,054 units.

Tampa's tightest apartment markets are in the urban core. Occupancy stands at 95.3% in the Intown Tampa area that surrounds the central business district; 95.6% in the adjacent Peninsula marketplace.

But occupancy in northeast Hillsborough County, however, has faltered to 89.4%. "Overly aggressive rent positioning appears to be a big factor in that lackluster occupancy performance," Willett says. Effective rents in northeast Hillsborough were pushed up 5.9% in the past year, "a time when overall rent growth for the metro as a whole was much more modest at 1.4%," the researcher finds.

"Tampa is entering 2002 with much more momentum than most other apartment markets across the country," Willett tells GlobeSt.com. "Even here, however, the leasing environment should be competitive, particularly among the top-end communities."

The researcher says "the premier existing properties will have to compete with desirable new projects coming on stream at likely discounted rents, and these developments also could struggle to retain their comparatively affluent residents who are key prospects for single-family home purchase."