Betting on big rents, Gas Worx developers hope to break ground by mid-2024
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Aug 10, 2023

The developers of the mixed-use Gas Worx district are betting that their vision for a unique, walkable neighborhood in historic Ybor City will create a place special enough to overcome economic headwinds.

Gas Worx developers Darryl Shaw and Washington, D.C.-based Kettler have submitted renderings for three buildings to the city's Barrio Latino Commission. The Barrio Latino Commission is responsible for maintaining the architectural integrity of historic Ybor City. These buildings are the second phase of Gas Worx; the first phase began construction earlier this year with a 317-unit apartment building with 2,500 square feet of retail space.

The second phase includes a five-story, 140-unit apartment wrapped around a parking deck with 19,454 square feet of retail space at 1315 E. Fifth Ave. It also includes the historic warehouse at 1301 E. Fourth Ave., which will be split into two structures: One will restore the warehouse for food and beverage concepts and retail tenants; the other will be a six-story building with ground-level retail and restaurant space and five stories of office space (86,600 square feet). There will be a total of 39,100 square feet of retail space between the restored warehouse and the office building's ground floor.

Multifamily and office real estate face significant challenges, from rising interest rates and insurance costs to a hybrid work trend that has companies leasing less space than they did pre-pandemic.

Those increased costs come as rent growth in the Tampa Bay region is hitting a plateau. The combination of slowing rent growth and increasing costs has forced a developer on St. Pete Beach to exit plans for an apartment-and-retail project on the intracoastal waterway; in downtown Clearwater, developers are trying to shrink the size of their project to account for a changing market. A long-awaited mixed-used development in Dunedin is on hold because it is financially unviable.

But Gas Worx is different, said Graham Tyrrell, Kettler senior vice president. He said the office space would need to be 50% preleased before beginning construction, and the developers have seen "good interest in a large portion" of the 86,600 square feet planned.

"What we recognize about these [properties] in particular is that this is going to be the core of the Gas Worx neighborhood," Tyrrell told the Tampa Bay Business Journal. "We're building a place as much as we’re building buildings. We're establishing a part of the community and looking to add value, and so with that, it can be more aggressive on the economics."

Tyrrell declined to say what kind of rents the developers expect at Gas Worx. At full buildout, Gas Worx will include more than 4,400 apartments, 325 of which will be designated for workforce housing, Tyrrell said. He compared the market-rate apartments in the project to The Pearl, a retail-and-apartment building in the Armature Works-anchored Heights district.

One-bedroom, 568-square-foot units in The Pearl rent for $2,268 to more than $3,000 monthly.

"The demand for this location will increase rapidly," Tyrrell said. "So we hope that will translate into the higher rents."