Pinellas County, FL Multifamily Market Report

Pinellas County Market Overview

Pinellas County, located on the west coast of Florida, is a vibrant and diverse community known for its stunning beaches and cultural attractions. With a population of over 961,000, it is the seventh most populous county in the state. The submarkets included in the following report are Central Pinellas, Northwest Tampa, South Pinellas, North Pinellas, and Downtown St. Petersburg.

Highlights

• With over 32,000 units, Central Pinellas is one of Tampa’s major multifamily submarkets.
• Northwest Tampa is a mid-sized submarket in Tampa with around 17,250 units.
• Like other multifamily submarkets in the Tampa area, the South Pinellas submarket has seen fundamentals erode over the last year.
• The delivery of approximately 400 units during Q2 2023 has increased the submarket’s vacancy to 7.7%, a YOY increase of more than 250 basis points in the North Pinellas submarket.
• Downtown St. Petersburg has been one of Tampa’s most highly sought after submarkets over the last few years.

Central Pinellas

Rents | Vacancy | Construction | Sales

The YOY growth rate has slowed to 0.2%, a significant difference from the high of 27% seen in H2 2021. Class A landlords have reduced asking rents, now standing at an average of $2,080 per month. As of Q3 2023, the vacancy rate stands at 6.8%, more than 100 basis points higher than it was this time in 2022. Demand has shown a positive trend, with approximately 160 units absorbed during H1 2023. Over the past five years, multifamily construction has been critical to the submarket’s growth, delivering over 3,900 units. In the last 12 months, 519 units have been delivered, all of which are Class B communities. Currently, 760 units are in the pipeline, which will expand the submarket’s inventory by 2.4%.

The investment sales volume for the past 12 months has remained stable, with a total of $291 million in multifamily investments occurring during that period. Approximately $135 million changed hands in H1 2023, which is consistent with the trading activity observed during the initial six months of 2022.

Central Pinellas by the Numbers Last 12 Months

• Vacancy Rate: 6.8%
• Asking Rent Growth: 0.2%
• Delivered Units: 519
• Sales Volume: $291M

Northwest Tampa

Unlike other Tampa submarkets, the increase in vacancy within Northwest Tampa over the last 12 months can be attributed solely to renters vacating their units. A consistent trend of renters leaving this submarket has resulted in five consecutive quarters of negative absorption. Over the last 12 months, the submarket has recorded -190 units of absorption, which has resulted in a vacancy rate increase to 5.8%. The lack of demand from renters has prompted communities throughout the submarket to halt their rent increases, with the average rent now at $1,680 per month.

The Northwest Tampa submarket has a history of experiencing limited multifamily investments, with several quarters in the past decade passing without any transactions. This trend has been particularly pronounced over the last 12 months, with the most recent transaction occurring in Q2 2022. It is expected that the submarket will continue to face constraints on multifamily investments in the upcoming quarters, primarily due to ongoing economic uncertainty and fluctuations in interest rates that are affecting the capital markets.

Northwest Tampa by the Numbers Last 12 Months

• Vacancy Rate: 5.8%
• Asking Rent Growth: -0.9%
• Delivered Units: 0
• Sales Volume: $0

South Pinellas

Rent growth has undergone a significant adjustment over the last 12 months, settling into a more sustainable pace at 2.6%. The submarket boasts an average rent of $1,600 per month. In terms of different community types, Class C communities are leading the submarket in asking rent increases, with a 4.3% rise YOY. Class A communities have begun to experience a contraction in asking rents, currently down by 0.5% YOY. South Pinellas stands out as one of the few submarkets in Tampa that has seen an increase in occupancy. As of Q3 2023, the vacancy rate in South Pinellas is at 6.1%, marking a reduction of over 100 basis points YOY. About 1,400 multifamily units are currently being built, making up approximately 7.0% of the total development projects in Tampa.

Investment activity in South Pinellas has reached a standstill, with a total sales volume of around $25 million year-to-date (YTD). Private buyers have been the most prominent participants in the market in 2023, making up approximately 85% of all buyers during this period.

South Pinellas by the Numbers Last 12 Months

• Vacancy Rate: 6.1%
• Asking rent Growth: 2.6%
• Delivered Units: 12
• Sales Volume: $73.3M

North Pinellas

Due to heightened competition for renters in the past 12 months, landlords have begun reducing their rental rates. As of Q3 2023, asking rents have seen a YOY decline of 1.0%, now averaging $1,660 per month. The vacancy rate has surged by over 300 basis points YOY, reaching a three-year peak at 7.7%. The most significant vacancy rate increases have been observed in Class A communities. There has been limited new construction in this area for an extended period, with only 730 units added to the market in the past five years.

For more than a year, there was virtually no activity in multifamily investment in the submarket. However, this changed in Q3 2023 when Bell Partners acquired the 773-unit Lansbrook Village by ARIUM in July 2023 for $200 million. This equates to approximately $260,000 per unit, which is roughly 15% higher than the average price per square foot in the submarket. This transaction stands out as one of the largest single-property sales in the history of North Pinellas. Aside from this sale, there has been less than $15 million in total investment activity in the area over the past year, with an average price per unit of $210,000.

North Pinellas by the Numbers Last 12 Months

• Vacancy Rate: 7.7%
• Asking Rent Growth: -0.7%
• Delivered Units: 396
• Sales Volume: $216M

Downtown St. Petersburg

Downtown St. Petersburg stands as one of the priciest multifamily neighborhoods in Tampa, boasting an average monthly rent rate of $2,250. Before the pandemic’s arrival, this submarket was at the forefront of the region regarding rent rate increases, reaching its peak at nearly 25% in Q3 2021. Since this peak, rent growth has gradually decelerated every quarter, resulting in a 2.6% YOY change as of Q3 2023.

Around 580 units have been completed in the last 12 months, leading to the vacancy rate reaching its highest point in three years at 7.4%. The vacancy rate is anticipated to face additional challenges in the upcoming quarters as an additional 820 units are expected to become available. Nevertheless, Downtown St. Petersburg is projected to remain a highly desirable area in Tampa. As a result, vacancy rates are anticipated to rebound swiftly to pre-pandemic levels by 2025.

Investment activity in the Downtown St. Petersburg multifamily submarket tends to have periods of fluctuation. It appears to be a slower year for investment in 2023, with transactions totaling less than $10 million YTD. In the last 12 months, the submarket has seen $53.9 million in investment, most of which occurred in Q4 2022.

Downtown St. Petersburg by the Numbers Last 12 Months

• Vacancy Rate: 7.4%
• Asking Rent Growth: 2.6%
• Delivered Units: 577
• Sales Volume: $53.9M