Tampa's condo market softens
By JANET ZINK
Published November 5, 2006
TAMPA - With sangria, tuna tartare and a raffle for a bright blue Vespa, the developers of the Slade in the Channel District celebrated the grand opening of their condominium sales center last month.
A guitarist plucked out Latin music, waiters circulated with trays of roast pork on black bean bread, and real estate agents, land use lawyers and Channel District champions gazed at a model of the development. Backers of the Slade say they have presold 100 of 280 planned units.
But by all accounts, the party is over for most other condo developments in and around downtown Tampa.
Weeds, not construction cranes, are spouting in more than one expensive empty tract. Tampa's long-sought dream of a vibrant residential core, while not gone, appears to be seriously diminished, at least for the time being.
Pinnacle Place, once slated for 41 stories and 408 units, is on hold.
The developers of C near Platt Street and Bayshore Boulevard, opened and closed their sales offices within a few months.
SimDag bagged its plans for the 280-unit Plaza at Channelside and is looking for a hotel chain to partner with on the site.
And Wood Partners, the Atlanta team behind a condo tower on Kennedy Boulevard, have canceled contracts with 30 buyers and are seeking a new way to finance their project. Their plans to build a 32-story condo tower on the site of the old Maas Brothers building, which has been demolished, are on hold indefinitely.
Rising interests rates, sagging home sales and climbing construction costs have put the brakes on some of the most significant projects planned in and around downtown.
All told, about a dozen projects with more than 4,100 planned units have either been delayed, put on hold or are simply dead.
The only sure bets at this point, developers say, are those that already have construction financing or the means of financing projects themselves.
Banks have stopped lending money for condominium projects, said Mark Huey, manager of economic development for Tampa. "You see that happening throughout the state and the country," he said.
That means many projects still in the planning stages downtown either won't happen or will have to wait until the market changes to start construction.
Jeanette Jason was part of a group that planned to build three high-rises with nearly 1,000 units on the block occupied by the old Kress department store. The property is now for sale. "A lot of banks aren't touching condo projects at this point," Jason said.
Ken Stoltenberg is one of the lucky ones.
He's the developer behind Grand Central, now under construction in the Channel District. Almost all of the 392 units have been sold.
There's still a market for condos priced below $500,000 a unit, he said. "I wouldn't want to be selling $1-million units right now, but the moderately priced stuff, my thinking is going to do just fine," he said.
Frank DeBose, part of the group behind the defunct 02 at Pinnacle Place, agrees.
"We've put too much housing in the higher end," he said.
Buildings with high-priced units now under construction will probably have to drop their prices, he said.
"Five years from now, the discussion is going to be about all those $700,000 and $800,000 condos downtown that you can buy for $300,000," he said.
Meanwhile, those with projects in the planning stages are waiting for the price of construction materials to level off so they can build reasonably priced units to attract the young professionals who are most likely to be interested in urban living.
Even if the boom has ended, developers don't believe downtown is a total bust. Most see the change in the real estate market as a correction that will result in condos being built at a slower pace and bought by people who will actually live in them instead of investors.
Janet Zink can be reached at firstname.lastname@example.org or 813 226-3401.
[Last modified November 5, 2006, 00:39:36]
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