Wednesday, July 18, 2018
Business

What does a top land broker say about Tampa Bay's real estate market?

TAMPA — As Mark Twain once said: "Buy land; they're not making it anymore.'' That finite aspect of land is one reason it can be so valuable, especially in fast-growing areas like Tampa Bay.

Mark Eilers is managing director of land services for Colliers International in Tampa. For more than 20 years, he's been helping clients buy and sell land, either vacant parcels or developed land that awaits new uses.

"I made a conscious decision early on in my career to focus on land,'' says Eilers, 49, a Florida State University graduate. "One of the things taught to me is to be a specialist and know your product in and out. I was born and raised in Tampa so I know every inch of this place.''

Whether it's finding a buyer for a former strawberry field or selling a waterfront tract on Tampa Bay, Eilers is in a prime position to gauge the types of development that are going strong, the ones that are not and the parts of the bay area that are attracting the most buyer interest. He recently spoke with the Tampa Bay Times (edited for length).

How do current land prices in the bay area compare to those during the boom years of the early to mid 2000s?

We are back up and more in many cases, depending on the location. But construction costs are also higher than they were so these deals are much harder to get done.

Where is land most in demand these days?

St. Pete is probably the hottest spot right now, and south Tampa. St. Pete is doing an incredible job of re-branding itself, downtown St. Pete has a really incredible vibe. But markets like St. Pete and Tampa are running out of land. Let's be honest, you've got to find creative ways to repurpose existing real estate.

RELATED COVERGE: Former estate of August Busch Jr. sells for $5.4 million.

How do you do that?

Our office recently sold a seven-acre industrial building behind a Walmart off Gandy (Boulevard in Tampa) and once they got the bigger piece, they tied up two surrounding parcels and had it rezoned multi-family. Now 283 luxury apartments are going up. We currently have a 12-acre industrial parcel across from Hula Bay (near Gandy) that was propane storage and we are in the process of amending land use to allow for residential.

But where are you going to find that many acres in a built-up place like downtown St. Pete?

In St. Pete, you may start with a couple of vacant lots and you buy the house near there and assemble parcels to create a large parcel. But you're right, there is no 3-, 4-, 5-acre site waiting for development any more.

So where are buyers looking now for large tracts of land?

A big trend right now is mobile home parks. (Buyers) will take a mobile home or RV park when they get to the end of their economic life and maybe rezone it for townhomes or apartments.

As big tracts become scarcer, will the Tampa Bay Rays be able to find another location for a new stadium?

I have a piece called Snug Harbor at the foot of the Gandy (Bridge in St. Petersburg) that they looked at but I haven't heard back. The issue they are going to have is finding a central location where they can draw everybody in the bay area and also find a parcel that has infrastructure that can handle a lot of people coming in and out. Downtown Tampa would be a great (central) site, but infrastructure-wise it would be a nightmare getting people in and out of there.

Other than St. Pete and South Tampa, what are the hot spots for land deals?

The whole (Highway) 54 corridor in Pasco is on fire right now, especially around the Suncoast Parkway. Citrus Park is a great market, we're running out of land up there. And Carrollwood. I think we're getting to the point in some suburban markets like Carrollwood where redevelopment is coming into play, you might see an entire apartment complex demolished and redeveloped into new apartments. South (Hillsborough) is on fire, it's been the hottest home- selling market in Florida and it's branching east but the issue now becomes the urban service district. We are kind of maxxed out to the urban service line and what does the county do to expand water and sewer to accommodate the outer area.

Are any types of development cooling?

Multi- family (apartments). The lending market is tightening up so it's putting pressure on getting deals done even if they find land. Right now lenders are a bit wary. Are we going to be oversaturated in West Shore, for example, with all the top-dollar rents? How deep is the renting pool? Downtown Tampa is the same way. It's all predicated on the fact that because land is so expensive, rents have to be really high and (lenders) are concerned, do we have enough business to rent at $2 a square foot? Historically in Tampa, an apartment complex built in 1985 in Carrollwood is getting $1, maybe $1.30.

There is much talk that brick-and-mortar retail is dying. What does that mean for the land business?

The days of the big-box retailers are coming to an end. You'll start seeing vacant Kmart or Target or Walmart stores. There will come a point when they close and they get redeveloped into other uses.

Like what?

It depends on the location. It could be, say, an apartment deal with walkability with a small grocery like Lucky or Sprouts, then add in Starbucks and a restaurant. Or maybe a large distribution center — you hate to build new if you can retrofit an existing building. An Albertsons at Dale Mabry and Waters is now a church.

With prices for residential real estate rising so much, there's concern that we might be headed for another housing bust. Do you see signs that commercial real estate in general is slowing down or even facing a bust like that in 2007-08?

(Lenders) are much more methodical in underwriting than they were back then, and they are underwriting more intelligently. Now things have slowed done and people on all sides are being more careful, the lenders, the developers, everybody. It's good to see that. We are seeing a slowdown but its not like an economic slowdown. It's purely from the process and making sure everything is done right.

Contact Susan Taylor Martin at [email protected] or (727) 893-8642 Follow @susanskate

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