Channelside rental market getting crowded - Tampa Bay Business Journal:

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But the sudden conversion of neighboring condio complexesinto high-end rental unit s have caught Seaport Channelside in its wake, creating greaterr competition all around, and forcing Seaport developers to lowerr some rental rates. “It’ws affected us a little bit, but a lot of those othert apartments are a lotmore expensive, so they’ree not really competition,” DeMarcay said. “But therw are less people moving and less people going to apartmentsright now, so the market in general has forcedd us to reduce some rents.
” When construction started at Seaporft Channelside in February 2007, Tampa’s downtown area had just threes large rental communities, according to data collected by NAI Tampsa Bay. That included 206 unite at and 578 at Post Harbour bothfrom , and 454 units at Camden Ybor Harbour Place City Homes and Camdej Ybor City – which changed its name to at Ybor converted to condominiums a few years ago, leavinb fewer than 600 units left in the downtown rentalp market. That encouraged developers to look at downtownrentapl communities.
They did, and the rental marketf grew by morethan 1,000 units with new communities such as Vintage Lofts from and Phillips International Drivew from LLC. But when the condop market went sour, developments such as Element from Novare-intowngroup, Placed at Channelside from , Grand Central at Kennedy from and The Slad e from all made the moveto rental. A markert where just 1,500 rental units were expectex suddenly turned to morethan “It’s tough times right now,” said T. Sean managing director for NAITampa Bay. Some developersx are starting rentsat $1,300 for units no biggerr than 800 square feet, well above the market averagd of 90.
4 cents a square foot, according to Real Data Apartment Market Research. “The problemn is, some of these group s need to get a certain amount ofincomre [to pay mortgages], so they migh t be ignoring what the market could bear,” Lance When The Place at Channelside looked at how much it coulf rent units purchased by Southwest Properties at a bankruptcyg auction last October, owners there found comparable rents at betweej $1.50 and $1.70 a square foot, Lanc e said. But while such numberd might be workable forsmaller units, the average apartmentf size of The Place is a lot larger than a normalp apartment.
“Even though they have nicet finishes and nice amenitiesand everything, therde is a pricing line that you’re going to run into wherse your demographic becomes non-existent,” Lance said. “Thre number of people who can afforda $2,000o a month rent payment, I don’t think that pool is extremel y deep. If you’re going to pay $2,000 a month for a 1,000-square-footg place, you could easily get a mortgag for far lowerthan that.” Grand Centrakl at Kennedy had to take a hard look at the markey and the available rental pool before offeringt some of its 200 unitws for rent. But the complex can now boast a 97percenft occupancy.
Ken Stoltenberg, a director of Mercury which builtthe property, said he doesn’ft see neighboring projects as competitiojn but instead wants them to “I am thrilled that The Place is startintg to rent and that the Seaporft property is filling up becausr the more people they can get in there, the more it will help my Stoltenberg said. Work at Seaport Channelsidr is done, but builders of the Channel Districy apartment communitysay they’re still waiting to get paid. Eight different companies have filed construction liens agains tthe 422-unit rental projecrt totaling a little more than $4 million, the largestg from for $2.5 million.
“A lot of the subcontractors have gone past theirf90 days, and we’re still working with them to audity the last numbers so that we can get that last payoutg out to them,” said David DeMarcay, a VP with Synergh Properties Inc. “The money is there. We’rer just dotting all of our i’s and crossint all of our t’s.”