We are finding a significant increase in owners wanting to list their acreage. More flexibility regarding valuations and lower interest rates are making it easier for additional players to obtain financing for new acquisitions.
There remains a large number of single-family lots and homes yet to be absorbed surrounding Tampa Bay. However, the entitlement process for some tracts takes months, if not years, and now is the time for owners to put their acreage back in play.
With increased single-family inventory, rising gas prices and cost-of-living factors, we are seeing a real push to the rental side from the ownership side. Four thousand multifamily units are under construction or proposed for the Tampa Bay area over the next two years. Hotels have seen an increase in room rates due to the vast new offerings attracting greater numbers of visitors to the Tampa Bay area. With more significant sports, entertainment events and convention traffic coming to town, most notably Super Bowl XLIII, the Jungala addition to Busch Gardens and five new and expanded Bay area museums, there is a greater need each year for more hotel rooms.
The Bay area's population growth has spawned new interest from outside our market. The University of South Florida and the University of Tampa have benefited greatly from this growth through the creation of major partnerships. The result will be the creation of thousands of jobs to develop treatments for cancer (M2Gen/Moffitt/Merck), diabetes and Alzheimer's disease.
Transportation drive times extended by the explosive growth have more workers wanting to be closer to their homes by investing in office condominiums. Thus, infill land parcels have become very popular in areas such as Brandon, New Tampa, Carrollwood, Oldsmar and Wesley Chapel/Land O' Lakes, to name a few. There has been a significant increase in professionals who are not part of large firms and are now looking for the tax advantage in condo ownership.
The population surge has also led the way for an influx of self-storage operations. Single-story metal clad buildings are still common, but now vertical climate-controlled facilities are sprouting up everywhere, typically on infill parcels of one to two acres. With more and more of the population moving into smaller spaces like urban condos and rental units, there is a greater need for extra storage space.
Retail is still catching up to new rooftops; however, small retail strip and grocer-anchored centers are still seeking well-located land tracts. We have seen a slowdown in standalone product, with inline lease product moderately stronger. Obviously, less financing risk contributes to leasing versus ownership and building.
Industrial developers are retrenching and looking for smaller sites of 10 to 20 acres, as opposed to 50 to 100 acres or more in prior years. Land assemblages are in play in urban settings, as the larger industrial tracts nearby are non-existent. So, committing to large acreage tracts further out, along with their carry time, does not fit all developers' criteria.
Land is back in play, but not in all sectors. The current state of the economy has dictated various businesses such as self-storage, office condo, rental multifamily, smaller industrial sites and hotels (urban and suburban/interstate locations), to name a few.
We are seeing strong listing activity, closings on the rise, significant increase in site seekers and an overall increased optimism regarding the economy for the later part of this year and into 2009. If you have land, put it in play.
The views expressed here are those of the author and not of Real Estate Media or its publications.
Mark Cooney is executive director of GVA Advantis in Tampa and a veteran land broker. He can be reached at [email protected].
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