Multifamily Still Selling Strong Across Southeast
ATLANTA—Multifamily is still selling strong in
Florida, Georgia, the Carolinas and
Tennessee. Indeed, the year-end deal flow
saw apartments making headlines.
Locally based RADCO, for example,
went on a spending spree, acquiring seven
“There is liquidity in th sector, and
the fundamentals make value-add mul-
tifamily the perfect fit for us today,”
says RADCO CEO Norman Radow.
“Our reputation has allowed us to raise
equity privately, without resorting to
Blue Rock Partners is another active
multifamily buyer in the Southeast. In a
joint venture with Konover South, Blue
Rock in December snapped up three multi-
family properties for $66 million in
December. That gives Blue Rock more than
6,000 multifamily units in the Tampa Bay
and Orlando areas—and the firm isn’t
done investing yet. Blue Rock plans to
invest another $9 million to improve the
a $154-million multifamily portfolio that
includes assets in Jacksonville. Cortland
CEO Steven DeFrancis says the demo-
graphic population growth for Florida is
undeniable, and he points to job growth
and infrastructure improvements begin-
ning to manifest in Jacksonville.
“The completion of the 295 loop
across northern Jacksonville essentially
relocates this sector closer to jobs and
entertainment venues and may have a
similar effect on this portion of the city
as the completion of GA 400 had on
the Atlanta MSA,” DeFrancis says.
“The port of Jacksonville and dis-
tribution infrastructure stand to have
ample gains as larger freighters are
allowed through the expanded Panama
Canal and the Shands hospital expan-
sion, coupled with a robust growth in new
retail centers bodes well for Jacksonville’s
“There is liquidity in the sector,
and the fundamentals make
value-add multifamily the perfect
fit for us today.”
—Norman Radow, RADCO
“Blue Rock’s accelerated investments in
the Tampa Bay and Orlando markets
underscore our confidence in the region,”
says principal Randy X. Ferreira.
And, marking its entry into the Florida
market, Cortland Partners recently acquired
Obamacare Fuels Potential & Uncertainty for Tampa Healthcare
The Supreme Court’s validation of the Affordable Care Act, coupled with President Obama’s reelection, ensures Obamacare will
be implemented as it was originally intended over the coming
years. The new law has implications that stretch far beyond the
healthcare sector, and early signs indicate that Tampa Bay’s real
estate market may be a big winner.
Tampa has long been a hub for the healthcare and insurance industries, thanks in large
part to the availability of a
skilled and trainable labor
force. All told, about 30%
of the net new jobs created in the past year
have come from this industry.
Now there are signs that the healthcare sector’s share of the office market is growing following the 2010 passage of Obamacare, which will extend insurance coverage to more than 30 million additional Americans and
expand the operations of healthcare providers and the third party
administrators that serve them.
Jones Lang LaSalle research shows that healthcare-related tenants have nearly doubled their presence in the Tampa Bay region,
from around 12% historically to more than 23% of total leasing
volume today. This growth in market share should continue given
that healthcare users account for more than 20% of all active
requirements in the region’s office market.
Managed care providers and third-party administrators account
for the bulk of this volume, including some of the largest leases of
the past year: Medco Health Solutions’ 143,000-square-foot renewal,
Amerigroup Insurance’s 95,000-square-foot lease and WellCare
Health Plans’ 66,000-square-foot expansion.
By Chad Rupp
But the extent to which these users will continue scaling up their
space requirements as the law takes effect will remain unknown
until final enrollment numbers are determined. This has left some
of the Tampa market’s largest companies in “wait-and-see” mode
less than one year before enrollment under the new law begins on
Oct. 1, 2013. Case in point: one major third-party administrator in
the Tampa market plans to hire anywhere between 250 and 1,600
new employees depending on enrollment volume next fall.
Complicating this lack of predictability is the need for training
employees 30 to 60 days prior to open enrollment, which will force
tenants to lease space before knowing their long-term office
requirements. This uncertainty is leading users and their brokers
to get creative.
“Plug and play” office spaces offering large, flexible floor
plates that can accommodate scalable call centers are in high
demand. Tenants are also evaluating the benefits of multiple site
operations. And some users are willing to pay a premium for
office product adjacent to empty space, with the option to expand
in 2014. We also expect to see instances of adaptive reuse that
converts vacant retail product with ample parking capacity into
functional office space.
Anticipation leading up to next fall is fueling high hopes for
healthcare companies, and all indications point to the Tampa
office market being a primary beneficiary of business growth. This
surge of activity is making a measurable impact in a city and state
still rebounding from the recession.
Chad Rupp is managing director for Jones Lang LaSalle in Central Florida.
He can be reached at email@example.com. The views expressed here
are the author’s own.
Vital Signs...Orlando-area leisure and hospitality jobs increased 4.1% in Q3 2012.—Jones Lang LaSalle