(To read more on the multifamily market, click here.)

TAMPA, FL-A swelling migration of new residents is generating unprecedented demand for apartment and condo homes the Tampa Bay shelter market is striving to fill. So far, condo converters are leading the way, paying premium prices for existing apartments and shrinking the supply of for-rent apartments, according to a new market analysis by Marcus & Millichap Real Estate Investment Brokerage Co.

Transaction volume has doubled over the past 12 months, driven by large deals for condo conversions. The median prices have gained 19% to $57,400 per unit. “Condo conversions are steadily taking apartments out of stock,” says Linwood C. Thompson, Marcus & Millichap’s managing director of the firm’s National Multi Housing Group “New construction of market-rate apartments is limited as builders have diverted resources to condos.”

Additionally, Thompson says surging construction costs are limiting development of market-rate units. The average per-unit hard construction costs now exceed $90,000, “well above prices for existing units that are not regarded as conversion opportunities,” the executive says.

Apartment vacancy fell slightly to 7.2% in the first half, following the delivery of most of this year’s new supply. Thompson projects absorption for the rest of the year will outpace new construction, bringing vacancy down to 6.5% at year end.

Tampa’s economic and population engines are driving the condo and apartment markets, Thompson says. Tampa employers are on track to add 47,000 jobs in 2005, a 3.7% increase from a year ago. “Over the past 12 months, 43,600 people migrated to the Tampa metro area, fueling demand for apartments.”

Asking rents are expected to rise 2.8% by the end of the year to $769 per month. “Concessions are abating and effective rents are forecast to climb 3% to $720 per month,” Thompson says.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.