$1,750 1Q 2024
-1.5%
93.1% 1Q 2024
-110 BASIS POINTS
11.8% (FEB 2024)
3.3% (FEB 2024)
* Please note that these employment figures have been adjusted for seasonal variations and are based on Moody’s Analytics forecast as of January 1, 2024.
** Please note that these unemployment rates are estimates that have not been adjusted for seasonal variations, and they are derived from Moody’s Analytics forecast as of January 1, 2024.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
The opening quarter of 2024 ushered in a wave of cautious optimism for Tampa’s property owners and operators, highlighted by an encouraging uptick in absorption to 1,295 units. This positive momentum marks a promising start to the year for Tampa’s multifamily market, though the coming two quarters, typically the busiest for leasing, will be crucial for operators. Impressively, all but two of Tampa’s thirteen submarkets reported positive absorption, with Pasco County and Southeast Tampa leading the way, accounting for 45.3% and 24.6% of the quarter’s total absorbed units, respectively.
In the same timeframe, the Tampa region saw the addition of 3,557 new apartment units, with the bulk of this development occurring across four key submarkets. Pasco County led the charge, accounting for 42% of these new deliveries, or 1,496 units. Over the last year, Pasco County, Southeast Tampa, and North Tampa have stood out as the main centers of development activity, collectively contributing significantly to the expansion of the metro’s housing inventory with 3,825, 1,915, and 1,251 units, respectively.
Since reaching a near-historic high occupancy rate of 96% in mid-2021, Tampa’s multifamily occupancy has been on a gradual decline. The influx of new units has led to an occupancy rate of 93.1% in the first quarter of 2024, marking a 110-basis-point decrease from the previous year. Like many areas in Florida and nationwide, Tampa is experiencing a mismatch between supply and demand, with approximately 9,300 units delivered over the last year, but only 3,700 units absorbed. Although renter demand picked up in 2023, it still lagged behind the pace of new deliveries. However, the disparity between completed units and those filled is anticipated to decrease throughout 2024. Over the past year, the majority of demand has skewed towards higher-tier communities, with the luxury segment witnessing an absorption of 3,600 units. In stark contrast, Class B properties have experienced minimal renter interest, absorbing only 340 units despite the addition of 2,600 units to the market.
In the first quarter, Tampa experienced a modest year-over-year decline in new lease rents by 1.5%, mirroring trends in other high-supply Sunbelt markets. With the average monthly rent at $1,750, Tampa presents a cost-effective alternative to South Florida, enhancing Central Florida’s appeal to newcomers. Rent adjustments varied across the region, with annual changes ranging from a 1.1% rise to a 2.7% fall. East Tampa led in rent growth, alongside four other areas showing positive year-on-year shifts. In contrast, Southeast Tampa, with an average rent of $1,720, witnessed the smallest annual increase, dipping by 2.7%. However, in more affluent areas like Downtown St. Petersburg and Downtown Tampa, rents saw positive adjustments, outperforming many of the more affordable locales.
Average Monthly Mortgage Payment
Average Monthly Rent
The continued volatility in interest rates and a downturn in fundamentals have led to a cautious approach from institutional investors, who as recently as 2022 represented a 38% share of multifamily buyers in Tampa. MSCI data indicates that the transaction volume for single-asset, conventional multifamily properties in Tampa stood at approximately $1.3 billion on a rolling twelve-month basis. While not the lowest, this figure ranks in the bottom quartile when compared against other quarters in the past decade. On a quarterly basis, the investment sale landscape for multifamily properties appears sparse. Although this is preliminary data and might see minor adjustments as more transactions from the latter part of the quarter are accounted for by MSCI, the two sales recorded at the time of this analysis in Tampa represent the lowest level of activity since the Global Financial Crisis.
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
Please note that the income and expense data presented in this section is sourced from third-party providers. Our firm does not provide any warranty or guarantee as to the accuracy or reliability of this information. We recommend that users exercise their own discretion and professional judgment when interpreting and utilizing this data.
| Income Assumptions | Value / Unit | Year Change (%) |
|---|---|---|
| Rental Income / Occupied Unit | $1,702.92 | 7.9% |
| Recoverable Expenses / Occupied Unit | $92.32 | 11.4% |
| Other Income / Occupied Unit | $98.80 | 6.2% |
| Total Income / Occupied Unit | $1,894.03 | 7.9% |
| Rental Income | $1,578.92 | 7.0% |
| Recoverable Expenses | $85.57 | 10.5% |
| Other Income | $90.78 | 5.4% |
| Total Income | $1,755.27 | 7.1% |
| Operating Expenses | Value / Unit | Year Change (%) |
|---|---|---|
| Payroll | $138.78 | 6.4% |
| Repairs & Maintenance | $44.03 | 8.6% |
| Leasing | $54.45 | 4.7% |
| General | $40.30 | 6.2% |
| Marketing & Advertising | $21.07 | 13.6% |
| Repairs & Maintenance | $122.97 | 10.0% |
| Cleaning | $23.39 | 8.8% |
| Roads & Grounds | $20.69 | 6.2% |
| General | $78.89 | 11.3% |
| Administrative | $45.82 | 11.6% |
| Security | $7.89 | 2.1% |
| General | $37.94 | 13.5% |
| Management Fees | $49.54 | 6.0% |
| Utilities | $100.94 | 6.6% |
| Electric | $21.83 | 12.7% |
| Gas | $0.98 | -13.6% |
| Water/Sewer | $78.13 | 5.4% |
| Real Estate & Other Taxes | $235.74 | 8.4% |
| Insurance | $95.60 | 48.0% |
| Other Operating Expensees | $11.69 | |
| Total Operating Expense | $822.14 | 11.8% |
| Value / Unit | Year Change (%) | |
| Net Operating Income | $933.13 | 3.3% |
|---|
Tampa Bay’s rental market is set for another year of substantial inventory growth, as roughly 6,875 units are expected to be completed over the next four quarters, resulting in a 3.0% increase in the number of available units. This surge is largely concentrated in the Southeast Tampa, Pasco County, Downtown Tampa, and South Tampa submarkets, which are predicted to add over 4,560 units collectively in the coming year. Despite the current supply-side challenges, Tampa’s affordability relative to Miami bolsters its appeal as a cost-effective choice for newcomers to Florida. The metro’s ability to attract individuals and families from the costlier Northeast plays a crucial role in shaping its market dynamics. In fact, the Tampa metro area welcomed over 51,600 new residents last year, making it the fifth-largest growing metro area in 2023, according to the U.S. Census. This consistent influx of new residents is expected to continue, and possibly even grow, further solidifying the strength and attractiveness of Tampa’s apartment market among investors as supply side pressures recede into 2025.
