Capitalizing on structural inefficiencies for Class B multifamily

Inefficiency 1: The average apartment (in Tampa Bay) requires a credit threshold that exceeds the average credit of apartment seekers in the market

~133k

Households that earn $60k - $75k annually in Tampa Bay

Rental Units in Florida by Year of Construction

The mismatch between renters and rentable units that align with their credit worthiness is consistent throughout the state of Florida.

There is overwhelming demand for market-rate workforce housing and very limited supply.

Over 90% of the units developed in the last five years throughout Florida were Class A, even though the average renter cannot afford Class A rents

Inefficiency 2: The only only way to increase the supply of quality Class B multifamily is to renovate older assets, which is a laborious process and not well suited for large out-of-state firms

540k

The current average rent of the units constructed from 1970-1990 is $1,478 ($1.72/SF).  The average rent of the units constructed from 2020-2025 is $2,222 ($2.20/SF).

Most of the 1970-1990-vintage assets have not been renovated in the last 15 years.  Even after extensive renovations, such assets will maintain a healthy rental gap with newer vintage properties.

Large CRE fund managers, especially out-of-state firms, are not well suited to execute the tactical selection and meticulous re-positioning of 1970s & 1980s vintage assets.

So long as equity capital is tight (for unstabilized Class-B assets), pricing will be extremely attractive, especially as institutional interest in owning multifamily in Tampa Bay has grown considerably over the last ten years.