6 Fundamentals Pushing Commercial Property Profitability In Tampa
What fundamentals are driving the attractiveness of commercial property in the Tampa region now?
In our last report we covered several new residential real estate developments in Pasco and Hillsborough County, Florida. The conclusion is that these communities will continue to drive demand for, and profitability of commercial real estate in the Tampa region for both businesses and investors. Here are six more reasons we can expect more great performance for area properties over the next two decades…
In addition to the development of downtown Tampa, the area’s master planning communities have been gaining visibility with prestigious awards, and even Amazon has chosen the Tampa Bay to launch its Prime Now 2 hour delivery service with several regional fulfillment centers. The lifestyle and real estate investment opportunities in Tampa are not just gaining attention within Florida and the USA, but are once again on the radar of sophisticated global property investors as well.
With very few exceptions real estate investment growth and performance is tightly tied to jobs and employment rates. Tampa has been recognized as a top tech worker hub, and is attracting businesses and talented workers across multiple industries from startups to our largest ecommerce companies. This will continue creating an upward economic spiral with more surplus income, and more retail spending, which in turn feeds businesses and more jobs.
3. Need for Affordable Housing
Take a look at what some of the world’s biggest real estate deal makers are working on now. Property Shark data shows NY is experiencing the largest surge in foreclosures in 6 years, while the biggest commercial real estate transactions in the Big Apple have recently been dominated by affordable housing projects. Tampa has far more affordable housing than most desirable destinations, and that will continue to attract businesses, tech workers, and retiring seniors looking for more Sunshine State property for their dollar.
4. Business Needs
Businesses continue to recognize the need to operate leanly and locate need affordable housing in order to attract and retain workers, while keeping up profit margins. This will only draw more high profile commercial tenants and hot startups to Tampa Bay.
5. Panama Canal Widening
The $5.4 billion Panama Canal widening project is complete. With ships that can now carry 3x the cargo expectations are that Tampa will enjoy a windfall from new import, export activity, as well as the ability to reach and connect with new markets.
6. Investor Needs
The Brexit, new tax breaks, and overseas economic and political uncertainty is expected to drive record amounts of foreign capital into US real estate over the next 17 months. But investors are already hard pressed to find value and acceptable yields in major gateway cities like San Francisco, Miami, and New York City. The Urban Land Institute believes this will drive more money to secondary markets like Tampa.