UPDATED, Feb. 5, 2:11 p.m.: The headliners in Tampa this weekend are no doubt Patrick Mahomes of the Chiefs and Tom Brady of the Buccaneers, but the two star quarterbacks aren’t the only game in town.
While Jeff Vinik, Bill Gates and Ian Schrager will definitely not be suiting up on Sunday for Super Bowl LV, the trio are key players in a $3.5 billion mixed-use project set to transform the host city’s downtown waterfront. And with residential sales buoyed by a Florida market that has seen buyers move south for the climate, room, lighter taxes and less stringent Covid regulations, Tampa has attracted a crowd that will stay long after the Big Game.
Much of that focus is centered on the massive Water Street Tampa. The 56-acre, 9 million-square-foot complex is being developed by Strategic Property Partners, a partnership of Vinik and Cascade Investment, a fund controlled by Microsoft’s founder. In addition to apartments, condos, restaurants and offices, the megaproject includes three hotels. The 519-room JW Marriott Tampa Water Street opened last month and the city’s first five-star hotel, Schrager’s 172-key Tampa Edition with Marriott International, just topped off and will open later this year. It will also have 37 luxury condos above the hotel, along with 30,000 square feet of retail space. The third hotel is the Tampa Marriott Water Street, which has 727 rooms and is directly across Water Street from the JW Marriott.
The hospitality industry has been scorched by the pandemic, but Tampa has been among the most resilient markets, consistently ranking highest in occupancy nationwide — albeit drastically below pre-pandemic levels — according to hospitality research firm STR. Schrager, who created The Edition brand with Marriott, said he was optimistic about his first project in the Big Guava.
“Having been through events like 9/11 and other bad economic cycles, things always go back to normal,” Schrager said in an interview with The Real Deal. “A project of this scale sets its own tone and its own tempo. It doesn’t have to march to the same drumbeat that everyone else does.” He added, “it is not often in life that you get an opportunity to do a project that can be completely transformative and change the soul and heartbeat of a city.”
Water Street Tampa, touted at its 2017 groundbreaking as one of the largest real estate developments in the U.S. located in an existing central business district, will include three apartment complexes: the 420-unit Heron at 815 Water Street, a 23-story, 388-unit tower at 1011 East Cumberland Drive and a 22-story, 511-unit development at 1050 Water Street,.
Drawing a crowd
Tampa and neighboring St. Petersburg have drawn the attention of South Florida developers, with the likes of Related Group and BTI Partners launching projects and pouring millions of dollars into the area. Related acquired 8.5 acres from BTI’s 52-acre master planned community called Westshore Marina District, where it built a 396-unit complex.
“We’re getting big city folk from Chicago and New York City who like the fact Tampa is not overcrowded,” said Dominic Pickering, sales director at BTI. “The Tampa Bay region is much smaller than South Florida. There is less traffic, much more open spaces and a lot of beachfront you can still have access to.”
Schrager said buyers at the Edition’s condo portion include locals looking to upgrade and out-of-towners from the Northeast, Midwest and California.
Last year, Tampa ranked fourth in U.S. cities that attracted new residents from more expensive metros, according to a Redfin report released Thursday. The influx has led to a housing crunch in Tampa, the data showed.
Luxury single-family and condo sales have also jumped, according to a fourth quarter Douglas Elliman report. High-end properties were on the market for an average of 40 days in the quarter, compared to 56 days over the same period in 2019. The average sale price for a Tampa home, about $440,000, was up nearly 8 percent year-over-year.
Elliman broker Niel Allen said low inventory and a growing population is driving demand and prices across Tampa and St. Petersburg, where the average homes sale price of $436,500 in the final quarter was up 29 percent year-over-year.
“I have a client who sold his business in Rochester, New York, and is buying a home in a golf community,” Allen said. “We are seeing a lot of people from Westchester and Washington counties in upstate New York.”
In September, retired Yankees superstar Derek Jeter and his wife Hannah, listed their 31,000-square-foot Tampa waterfront mansion for $29 million. The couple had been renting out “St. Jetersburg” to Brady and his wife, Gisele Bündchen. A month later, Brady and Bündchen were reportedly closing on a waterfront mansion in nearby Clearwater for $7.5 million, and in December they were revealed as the buyers of a $17 million waterfront property in Miami.
Prices remain high in the South Florida residential market, which has been riding a wave since the summer, with single-family and condo sales spiking. The trend continued in the fourth quarter, according to Elliman.
Getting in the game
At the Water Street Tampa, the new office and retail complex on Channelside Drive called Sparkman Wharf now has 15 tenants, according to a Strategic Property spokesperson. Four new tenants signed deals last month and leasing at the Heron apartment complex was ahead of projections.
“We’re getting big city folk from Chicago and New York City who like the fact Tampa is not overcrowded.”
Part of that is a result of “outside investors looking to capitalize” on the market, the spokesperson said. BTI is among them. The Fort Lauderdale-based developer has made big plays in Tampa in the past few years. It recently scored a $92 million loan from Bank OZK to finance the construction of the first phase of Marina Pointe. The three-tower mixed use project in the Westshore Marina District will rise alongside those from Related Group and southwest Florida-based WCI Communities.
The project, which broke ground over the summer and is scheduled to open next year, includes a 120-unit condo tower, 78 marina slips and 32,000 square feet of retail space. The development is part of the 52 acres BTI acquired several years ago, most of which it has sold off.
“We kept the peninsula that juts out into the Gulf for ourselves,” BTI’s Pickering said. “It is the jewel in the crown.”
Correction: The 388-unit complex at Water Street Tampa is a rental not a condo tower. Also, Jeff Vinik is the controlling member but not sole owner of Strategic Property Partners.