Related Is Charging Into Tampa
Related Group has so dominated South Florida — having developed some 90,000 condominiums and apartments here — that it seems synonymous with Miami. But the company is spreading its reach to Orlando, Dallas, Atlanta and Cancun, but especially Tampa, where it has four projects underway.
“We are busy in the Tampa Bay area in a big way,” Related President and CEO Steve Patterson told Bisnow. “We're pretty optimistic about the future of Tampa.”
Related has focused strictly on multifamily rentals so far. The company developed the 356-unit Pierhouse Channelside in Tampa in 2013 (then sold it to Florida's public pension fund for $76M), and completed the 400-unit Parker Street Apartments this year.
The company's current projects include Manor Riverwalk, a 400-unit luxury apartment complex along the Hillsborough River, where the Tampa Tribune headquarters once stood (set for completion in early 2019), Town Westshore, 396 apartments in the Westshore Marina District (which broke ground in August) and Icon Harbour Island, 340 rental units that are ready for move-ins.
Related Urban Development, a Related division, was chosen as lead developer to revitalize Tampa's $750M West River area with mixed-income housing. A bit further south, Related is building another of its luxury, Icon-branded properties in St. Petersburg, 368 units in the city's Edge District that are about to break ground.
“My thing about Tampa is that the economy is broad. There are 19 or 20 headquarters of Fortune 1000 companies there,” Patterson said, citing a mix of technology, healthcare and financial services companies.
Compared to South Florida's service-based economy, Tampa's is well-rounded, Patterson said. Plus, the city has a port creating $15B of economic impact and an educated workforce spilling out of the University of South Florida and the University of Tampa.
“There are a lot of good jobs for millennials,” Patterson said. “I think the quality of life in Tampa continues to get better all the time.”
He ticked off attractions: a growing arts scene, pro sports teams and water.
But that does not mean Related is getting out of Miami.
“Miami is our home, and we're always going to have a major presence in South Florida,” Patterson said.
Related has recently been charging ahead with some of its South Florida projects: It finally opened Icon Las Olas after two decades of legal wrangling; it is building Park Grove in Coconut Grove and has proposed building office there; and it is moving forward with Auberge Beach Residences & Spa Fort Lauderdale and three projects in Wynwood.
But the company has pulled back on other proposals, canceling plans for an Auberge in Miami and rescinding plans for an overhaul of the Olympia Theater.
“We're very cognizant of development cycles,” Patterson said. “Florida for us is a long-term play. Business plans become more generational.”
As for South Florida, Related does not think it is overbuilt, Patterson said, especially in Palm Beach, Broward and western Dade.
“There's an enormous amount of demand that's not being met outside of urban zones," he said. "We believe there's more demand than supply, and we feel the same about Tampa.”
Related is not alone in eyeing Tampa, which, according to U.S. census figures, was the city with the fourth-highest population growth in the country last year. Money manager/Tampa Bay Lightning owner Jeffrey Vinik is working with Bill Gates to redevelop 50 acres in a project called Water Street Tampa. Patterson said while his team has ended up in meetings with the Water Street representatives at times over the past few years, they are not collaborating.
“They're attempting to internalize most development activity,” Patterson said. “Whether a third party gets involved ... I think the current plan is for them to handle it themselves.”
Asked if there there were any notable design innovations in his Tampa projects, Patterson said, “Quite frankly, I think the most innovative thing has nothing to do with architecture; it has to do with location. The newest big amenity is walkability.”
Related Group pays close attention to walkability scores when considering locations, he said, and spends “an enormous amount of time” combing through market data.
“We are constantly looking at tertiary markets or underserved markets,” he said, noting that Related has been active in Wynwood and in areas of Atlanta and Dallas. “We're focused on markets that have good, prosperous job growth and where production does not seem to be outpacing demand.”
As for advice to to anyone starting out in real estate, Patterson said, “I guess people coming into the multifamily business — the most important thing for them to know is that this is here to stay. The U.S. is not going to continue to grow through suburbanization, but through urbanization. And urban living simply mandates multifamily living.”
Developers working today should focus on housing that millennials will be drawn to, he said. He believes that generation will continue to rent, thanks to their $1.5 trillion in student debt, and that they will continue to seek downtown destinations.
“There's always going to be a percentage of families that want a single-family home and a yard for the dog and kids,” Patterson said. “But I think the big sea change is the continued urbanization and less reliance on automobiles. I woke up today and [the news said] they're working on autonomous flying cars. I haven't even gotten used to Amazon delivering packages with drones yet.”