Tampa: The New Austin, Texas? $3.5B Project From Bill Gates, Jeff Vinik Leads Development Boom
As the mayor of Tampa, Jane Castor admits she is the city's biggest cheerleader. Tampa teams won the most recent Stanley Cup and Super Bowl, she pointed out during a Bisnow event called The State of Tampa on April 29.
“We came an inch away from the World Series. And we also won the soccer championship with the Tampa Bay Rowdies,” Castor bragged. “Everybody's got their own dolphin, their own manatee,” she joked.
While personal dolphins may be an exaggeration, the real estate boom is not. People and companies are moving in at a rapid pace. Hillsborough County is reportedly the ninth-fastest-growing metropolitan area in the U.S.
“We had 52 major developments in progress, and we were able to continue that through the pandemic,” Castor said. “We in fact permitted $4.5B last year in development, in 2020 through the pandemic, and that was $1.9B more than was permitted in 2019.”
Front and center amid the region’s development is Water Street Tampa, a $3.5B massive mixed-use project on about 50 acres being developed by Strategic Property Partners, a partnership between Bill Gates’ Cascade Investment LLC and billionaire Jeff Vinik, who owns the Tampa Bay Lightning pro hockey team.
According to a master plan, Water Street Tampa’s components include residential buildings; hotels, including an Edition that also has residences; office buildings; and Sparkman Wharf, an outdoor food hall and waterfront park with 65K SF of retail.
The project is situated along the Hillsborough River riverfront, near major landmarks such as the convention center and Amalie Arena. Some of the buildings, including the Heron apartments, the JW Marriott and restaurants at the wharf, have opened in the past few months. Construction is reportedly slated to continue for five years.
Strategic Property Partners Chief Portfolio Officer Lee Schaffler said that 130 people per day move to Tampa.
“There are few cities that have this dynamic, with a friend in the mayor's office, and a friend in all of the local municipal governments that are pro-business, pro-development, pro making the landscape a better place,” Schaffler said.
The State of Tampa event was held at 1001 Water St., part of Water Street Tampa. The brand-new, 20-story building along the Tampa waterfront is the first trophy office to break ground in Tampa’s downtown in over 30 years. It has 375K SF of office space and 12K SF of retail, with a biophilic design — including terraces and floor-to-ceiling windows — that’s meant to bring in natural light and connect workers with nature. With a focus on walkability and wellness, the whole Water Street Tampa development is the world’s first WELL Certified community, according to the International WELL Building Institute.
Taylor Collins, a partner at Two Roads Development, which is developing condo-hotel project Riverwalk Place, said his firm has been active in Tampa for about four or five years. When it first entered the market, potential investors were wary and wanted to do site visits before jumping in. That has changed, Collins said.
“We're in the process now of raising a $400M construction loan for the market and we have more term sheets on that loan than we have on our projects in Miami," Collins said. "Everyone sees what's happening in Tampa. They don't even need to come here anymore. They just say, ‘Show me the Google Earth; I like it; give me the numbers; let me talk to my boss; let me talk to your sales people; let's go.’”
Collins said he asks people, “Do you remember Austin 20 years ago?' It was this cute, sleepy, little town, with the University of Texas. Now it is like a tech hub … We are the new Austin, Texas.”
Related Group Senior Vice President Michael Hammon said his experience was similar. “It's just people knocking on our door trying to get us term sheets," he said. "It's across the board. It's a very hot market and now, obviously, on the worldwide stage.”
Hammon said his firm has about $4B under construction or development, and about $1B of that is in the Tampa Bay region, which includes St. Petersburg and Clearwater, and about $750M within the city of Tampa.
Related Group is developing a Ritz-Carlton Residences in Tampa, which is slated to begin construction later this year. Pitching Ritz-Carlton to do a project there was “an easy sell,” Hammon said. He also noted that rents in the Tampa area have gone up about 17% over the past year.
“Tampa Bay is just an unbelievable place to be right now in the construction business ... Multifamily is just an incredible market, and that asset class is the strongest by far," Moss Construction Management Senior Vice President John Bowden said.
“We're actually breaking ground on some pretty large hospitality projects in the Tampa Bay region,” he said, despite hospitality taking a hit during the coronavirus pandemic.
“We’re thrilled with business,” Stewart Title Senior Vice President and Mid-Atlantic/Southeast Sales Director Jack Kieley said.
ACRE Commercial Managing Partner Willow Ferrelli said that even retail is booming.
“Right now on our tenant representation side, about 30 to 40% is out of state, with people moving here wanting to open up businesses,” she said. “But then, really important local retailers are back. They pivoted, they twisted, they kept their staff, and now they are mapping out a growth plan.”
Schaffler said there’s high demand for Water Street Tampa’s retail space. “We're pretty much oversubscribed,” he said. Some potential tenants are being turned away.
Tampa Bay Economic Development Council President and CEO Craig Richard acknowledged that traffic can be frustrating, but he recalled what he said to his wife recently: “‘Wouldn't you rather be in traffic on your way to work, than the highway’s clear and you’re looking for work?’ To me, that's economic development. That's prosperity. That's progress."