Downtown Tampa's condo market tipping toward new construction
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Mar 16, 2015

Downtown Tampa appears to be heading toward its next condominium boom, if prices can catch up with demand.

About 4 percent of the downtown condo inventory - 85 units - is for sale, said Dave Traynor, a vice president of real estate and developer services with Smith & Associates in Tampa. That point in a market is typically when new construction starts to happen - but prices are just shy of where they need to be for new developments to be profitable.

Condo construction would be a major endorsement of downtown Tampa's ongoing revitalization effort. It would signal that developers and homebuyers are confident enough in the city center - and the neighborhood amenities there - to commit large amounts of money to the area.

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Units in Grand Central at Kennedy, Traynor said, fetch an average sales price of $256 per square foot. That number is slightly higher in Towers at Channelside and Skypoint - $358 and $326 per square foot, respectively. Prices need to be closer to $400 per square foot to justify new construction. In downtown St. Petersburg, where three condo towers are in the works, prices are around $500 per square foot.

Traynor, who was a speaker at the Tampa Downtown Partnership's annual development forum Friday, said he's hearing from local and national developers, some based in the Northeast, who are interested in downtown Tampa. The ones he's spoken with want to do large-scale towers - the type of projects that build urban density and can entice retailers and restaurants to an area.

"I wouldn't be surprised if we hear some developments being announced some time this year for downtown Tampa," Traynor said.

Sean Lance, principal of Vertica Partners LLC in Tampa, said he's also seeing developers start to look for sites, though none too seriously - at least not yet. He said he thinks there's potential for some of the fractured condo developments - multifamily buildings in which some units are owned and others are rentals - to convert to a full condo structure. Some of the apartments under construction, too, could some day be sold as condos, as they're being built with high-end finishes and characteristics more in line with for-sale units.

"I'm more of the mindset one or more of the ones being built will convert to condos," Lance said.

Traynor said he's encountering potential buyers who visit downtown Tampa and see things like the Sail Pavilion, recently opened Ferg's and the soon-to-be-completed Riverwalk and want to live within walking distance of it. Most of those buyers are interested in the neighborhood as it is, not just the potential of Tampa Bay Lightning Owner Jeff Vinik's plans for the souther fringe of the urban core.

Most see Vinik's plans as "the exciting outlier that's a couple years away," he said.

Ashley Gurbal Kritzer is a reporter for the Tampa Bay Business Journal.