Atlanta-based RADCO is part of a new wave of Tampa apartment owners paying more than $100k per unit to buy existing buildings, the first time ever average pricing for apartments reached that level in the land of sunshine and the NFL's Buccaneers.
RADCO purchased the St. Croix apartments, a 540-unit, Class-B complex in Tampa for $58.5M, or some $108k/unit. That price hovers close to the record average price achieved last year in Tampa of nearly $107k/unit, the first time it hit that level, according to a recent report by Cushman & Wakefield. Total multifamily sales volume in Tampa was $2.4B in 2016, with an average cap rate of 6.5%.
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RADCO CEO Norman Radow said he will be able to push rents up at the property once he invests nearly $7M in capital improvements and renames it Radius Tampa Palms, part of his new Radius brand of higher-end apartment complexes in the Southeast. RADCO owns five other apartment complexes in Tampa, but this would be the first Radius.
Radow said the property's proximity to the hospital and the university — plus being on Bruce B. Downs Boulevard, which is expanding from four to eight lanes — are all pluses for increasing demand in the area for housing.
“It's just a perfect storm for the property that we're buying at the right time,” he said.
Current rents average $950/month – below the market average of $1,120/month, so, for Radow, there is little doubt rents can be pushed higher.
“Even the seller raised rents significantly in the last two months [of ownership] without it affecting occupancy,” he said.
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