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Tampa Bay Multi-Housing Market to Remain Stable in 2015

Wednesday, July 08, 2015

The Tampa-St. Petersburg metro area produced close to 98,000 jobs from 2010- 2014, with average annual growth rate of 2.1 percent, marking demand for multi-housing buildings for sale in Tampa Bay. Employment and Population TotalsThe metro’s diverse and expanding mix of businesses, from financial services and bioscience to technology and international trade, bodes well for the healthy job creation. Employment growth is expected to increase once more in 2015 reaching 3.1 percent, which is expected to keep effective rent growth stable and multi-housing buildings for sale high.

Axiometrics said, “the Tampa Bay area is benefiting from the increased population and job growth that has come to all of Florida. Job growth is above the national level and there is just enough new supply, so demand will be strong and landlords can raise rents.”

Tampa Bay Multi-Housing Development

Apartment demand outpaced new multi-housing buildings supply by almost 2,000 units in 2014; new apartment supply was 3,966 units, and demand 5,900 units. Axiometrics expects new supply to increase in 2015 with 4,945 new units being delivered, whereas absorption will be almost 3,000 units behind, leading to moderating effective rent growth. Demand will once again outpace new apartment supply in 2016.

Multi-Housing Building Occupancy & Absorption

Tampa exceeded its 1997-2014 average occupancy rate (94 percent) by 80 basis points (bps) in 2014, reaching 94.8 percent, according to Axiometrics data. Absorption was 5,900 units in 2014, and is expected to moderate to 2,052 units in 2015.

In November 2014, Class A and B properties shared the highest multi-housing buildings occupancy rate: 95.2 percent. Class C was only 30 bps behind with an average occupancy of 94.9 percent.

Tampa OccupancyTampa Completions and Net Absorption 

Rental Rates for Multi-Housing Buildings

Annual effective rent growth was 4.7 percent at the end of 2014, 250 bps above the 1997- 2014 average of 2.2 percent. Effective rent growth is forecast to moderate somewhat in 2015 and 2016, to 2.7 percent and 3.1 percent respectively, before reaching a new peak in 2017. Class C properties had the strongest effective rent growth in 2014: 5.2 percent, followed by Class B (4.9 percent) and Class A (4.5 percent).

Tampa Rental RatesTampa Annual Rent Growth 

Contact HFF Tampa for more information regarding multi-housing properties on the market in this area.

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