The apartment market in Florida is strong and getting stronger, and could help lead the state out of its real estate slowdown, according to a number of speakers at a recent National Association of Industrial and Office Parks
multifamily real estate forum in Tampa.
"The rental segment is on a faster track of recovery than the sale and job market," says Michael Slater, president and owner of Triad Research
in Tampa, keynote speaker for the conference. "We believe demand for multifamily housing is growing. Because of economics, job losses and credit losses, the demand for rental housing has maintained its strength."
Also helping the apartment market has been a lack of recent building activity in the past 25 years, keeping the supply of apartments about the same, Slater says. Although revenue growth from apartments has been sluggish, occupancy is moving toward 95 percent in the Tampa Bay region.
"It's Economics 101, when demand grows but supply does not, the market will recover," Slater says.
Apartments are also attracting investors as well as residents, he says. Retail and restaurants are suffering because of slowdown in housing growth and job losses. Office and industrial space are hurting because of companies pulling back on expansion. Job and income losses have hurt new home sales. But apartments offer a less expensive, maintenance-free alternative to former home owners.
"It's not one thing that drives the other segments of the real estate market," Slater says. "In these times,
rental multifamily is the only one seeing positive signs. It is one of strongest investment areas now."
One key for apartment developers will be finding financing in a slower economy. The U.S. government
will likely be one source. A new 221D4 program
helps with financing of new construction of rental property. Investors and developers also looking at tax credits.
"They are waiting for the market to recover," Slater says.
Writer: Dave Szymanski
Source: Michael Slater, Triad Research