Ekovich cites a second similar scenario in Northeast Tampa. The 122-unit Courtyard Apartments was purchased in April 1999 for $2.65 million; it sold for $3.68 million 16 months later and immediately flipped for $4.4 million.

"Some properties will require a cash infusion for repositioning if such gains are to be realized, but astute investors may be able to stretch acquisition and rehabilitation dollars to maximize their returns," the broker says.

Tampa Bay area vacancies climbed 250 basis points in the past 12 months, to 9.8% from 7.3% in the second quarter of 2002, according to M&M data. Vacancies are expected to reach 10.5% by year end. "This increase will continue the trend of rising vacancies that began in mid-2001 when the economy slowed," Ekovich says.

Although sales activity was down, prices were up in the first half of this year. The estimated media price through second quarter 2003 registered $47,000 per unit, up from $45,625 per unit in 2002. Cap rates among reported transactions dropped to 8%, down from 9% last year.

"Tampa is one of few cities that did not record annual job loses for any year in the recent national economic downturn," Ekovich says. "Employment growth did slow, however, crawling to a trivial gain in 2001, and only slightly better growth in 2002."

Although Tampa fared better than many other cities, fewer jobs in the area still impacted the apartment market, the report states. Still, says Ekovich, "the proverbial light at the end of the tunnel is in sight, even as market fundamentals endure a difficult period in Tampa."

"Construction is slowing and employment growth is forecast to accelerate, which combined will strengthen the local apartment market," he adds.