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Industry leaders vary on whether the area, particularly New Tampa, is overbuilt. Meanwhile, renters are enjoying deals.
By BILL COATS
© St. Petersburg Times, published February 27, 2000
CROSS CREEK -- Karen Kelley's first day of apartment hunting in Tampa left her discouraged to the point of quitting. But her second day brought her to New Tampa, where 3,856 new apartments and townhouses were permitted since 1995.
"They were saying, "We're waiving this fee. We're waiving that fee,' " marveled Kelley, a 50-year-old mental health therapist moving from Hilton Head, S.C. "I went to the next one and it was the same thing. I went to the next one and it was the same thing." "They basically were saying, "What are the other people giving you? We're going to match it.' "
Kelley soon picked a new two-bedroom, one-bath apartment at Addison Park, a 336-unit complex nearing completion in Cross Creek.
Her rent of $785 was dropped for the first month. So were several non-refundable deposits, even though Kelley has two small poodles and a cat. So was the industry's traditional premium for a waterfront view, a duck pond. Addison Park loaned Kelley a washer and dryer for free and a small color television, which becomes a gift if Kelley fulfills the terms of her lease.
Then, a kind maintenance man assembled and installed her ceiling fan for free. He pledged to remove it for her when she moves away.
"I'm happy as a clam," she said.
Kelley is a renter in a renters' market that has formed in recent months as hundreds of new apartments open in New Tampa.
But the array of spanking-new choices and deals she enjoyed aren't unique to the Bruce B. Downs corridor.
In the Westchase area, 1,241 apartments and townhouses were permitted in the past four years. Another 1,000 apartments were announced nine days ago. In Citrus Park, the new mall apparently inspired construction of 624 apartments, according to permit totals.
That has triggered competitive scenes like the one last weekend, when Savannah at Citrus Park, a new complex of 264 units, clustered 40 balloons on a wall with varying rent concessions in each. New tenants got their first month's rent free, then tossed a dart at the balloons to win a concession on the second month's rent. One renter got the whole month free.
Industry leaders argue whether the area, particularly New Tampa, is overbuilt.
Michael Slater, whose Triad Research & Consulting Inc. specializes in real estate markets, said the industry's "absorption" of new tenants has slowed moderately in New Tampa. Last year, the average occupancy rate there dropped from 95 percent, which owners want, to 93 percent, which owners expect, Slater said.
"The whole Tampa Bay area has been over 95 percent for over five years," Slater said. "That was the first submarket to go below 94 in a couple of years."
"I think there are too many apartments under construction and in the pipeline," said Greg West, development manager of ZOM Development Inc., an Orlando-based apartment builder active in Tampa Bay.
He said New Tampa "has been oversupplied for at least a year. It's been a renters' market."
Consequently, ZOM is limiting its apartment-building to sites where competition is limited. For example, it picked the land for the 477-unit Arbors at Carrollwood along Ehrlich Road because no other tracts large enough for an apartment complex were nearby, West said.
Over the past month, apartment builders didn't pull a single permit in unincorporated Hillsborough County, after averaging several hundred monthly, according to the county's Planning Commission.
Yet Slater considers that a coincidence. He doesn't consider any of Hillsborough County overbuilt with apartments.
He conceded that in New Tampa, slower absorption may lead to slower construction. But new tenants continually will be lured there by employers like USAA insurance and Intermedia Communications, he said.
"We're talking thousands of jobs," he said.
"Long-term, there's no better market to be in," said Mark Eilers, apartment specialist for Tampa's Shoptaw-James Investment Group.
In the meantime, a scramble is under way.
"Right now, we're seeing a great number of specials being offered," said Rick Byford, a general manager for Apartment Hunters, which helps prospective tenants narrow their search.
"What I'm seeing across the board is two weeks' to two months' free rent."
Tammy O'Connor, property manager at the new 390-unit Grand Reserve at Tampa Palms, prides herself on being New Tampa's first apartment manager this year to send mailings to the tenants of all neighboring complexes, inviting them to the Grand Reserve.
"It's very friendly competition," she said.
All the complexes are advertising on radio, in newspapers and apartment guides and by direct mail, she said.
"You know what?" she said. "That's not going to change for a long time."
- To reach Bill Coats call 226-3469, or e-mail him at coats@sptimes.com.