WTL+a
Market Analysis University Redevelopment Area Hillsborough County, FL
Prepared for: Hillsborough County Economic Development Tampa, FL
May 2018
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 1 WTL+a
General & Limiting Conditions Every reasonable effort has been made to ensure that the data contained in this study reflect the most accurate and timely information possible. This data is believed to be reliable at the time the study was conducted. This study is based on estimates, assumptions, and other information developed by WTL +Associates (referred hereinafter as “WTL+a”) from its independent research effort, general knowledge of the market and the industry, and consultations with the client and its representatives. No responsibility is assumed for inaccuracies in reporting by the client, its agent and/or representatives, or any other data source used in preparing or presenting this study.
No warranty or representation is made by WTL+a that any of the projected values or results contained in this study will actually be achieved. Possession of this study does not carry with it the right of publication thereof or to use the name of "WTL+a" in any manner without first obtaining the prior written consent of WTL+a. No abstracting, excerpting or summarizing of this study may be made without first obtaining the prior written consent of WTL+a. This report is not to be used in conjunction with any public or private offering of securities or other similar purpose where it may be relied upon to any degree by any person, other than the client, without first obtaining the prior written consent of WTL+a. This study may not be used for purposes other than that for which it is prepared or for which prior written consent has first been obtained from WTL+a.
This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions and considerations.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 2 WTL+a
Table of Contents
General & Limiting Conditions ...... 2
Table of Contents ...... 3
Tables & Figures ...... 4
1 Executive Summary ...... 6 Introduction ...... 6 Study Area Boundaries ...... 6 Market Study Methodology ...... 8 Stakeholder Interviews ...... 9 Study Area Land Uses ...... 10 Preliminary Market Potentials ...... 13 Potential Sites with Greatest Redevelopment Opportunity ...... 13 2 Demographic & Economic Profile ...... 17 Demographic Trends & Forecasts ...... 17 Household Incomes & Retail Spending ...... 23 Retail “Recapture” Opportunities ...... 26 Economic Characteristics ...... 29 3 Real Estate Market Conditions ...... 43 Hotel/Lodging ...... 43 Workplace: Office ...... 49 Workplace: General Industrial ...... 56 General Retail ...... 61 Impacts of University Mall Redevelopment ...... 65 University Mall Redevelopment Plan ...... 69 4 Preliminary Market Potentials ...... 76 Workplace/Office ...... 76 Workplace/General Industrial ...... 82 General Retail ...... 86 WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 3 WTL+a
Potential Retail Customer Bases ...... 87 Hotel/Lodging ...... 92 5 Preliminary Implementation Strategies ...... 97 Opportunity Zones Program ...... 98 Redevelopment Incentives Program ...... 99 Potential Sites with Greatest Redevelopment Opportunity ...... 108 Recommendations & Phasing Considerations ...... 117 Preliminary Market Potentials ...... 119
Tables & Figures Table 1: URA Study Area—Summary of Existing Land Uses, 2017 ...... 12 Table 2: Parcels with Land Values > 50% of Just Values ...... 16 Table 3: Hillsborough County Population Trends & Forecasts, 2000—2040 ...... 18 Table 4: Demographic Trends & Forecasts—Hillsborough County, 2000—2022 ...... 20 Table 5: Demographic Trends & Forecasts—URA Study Area, 2010—2022 ...... 22 Table 6: Annual Household Consumer Spending, 2017 ...... 24 Table 7: Retail “Recapture” Opportunities—URA Study Area, 2017 ...... 27 Table 8: Tampa/St. Petersburg/Clearwater MSA Employment Trends, 1995—2017 ...... 31 Table 9: Business Mix—Hillsborough County, 2017 ...... 33 Table 10: State Employment Forecasts for Hillsborough County, 2016—2024 ...... 34 Table 11: Business Mix—URA Study Area, 2017 ...... 36 Table 12: 10-Year Employment Trends—URA Study Area, 2006—2015 ...... 37 Table 13: USF Enrollment & Employment Trends, 2014—2018 ...... 41 Table 14: Hillsborough County Hotel Inventory, 2018...... 45 Table 15: Selected Competitive Hotel Inventory ...... 46 Table 16: Market Performance of Selected Competitive Hotel Properties, 2012—2017 ...... 47 Table 17: Office Market Profile—Northeast Tampa Submarket, 2008—2017 ...... 51 Table 18: Class A Office Building Profile—Northeast Tampa Submarket, 2008—2017 ...... 52 Table 19: Office Market Profile—URA Study Area, 2008—2017 ...... 54 Table 20: Industrial Market Profile—Northeast Tampa, 2008—2017 ...... 58 Table 21: Industrial Market Profile—URA Study Area, 2008—2017 ...... 60 Table 22: Inventory of Retail, Vacant & Storefront Office Space—Study Area, 2018 ...... 62 Table 23: Preliminary Development Program for Uptown Tampa ...... 70 Table 24: Retail Market Profile—Northeast Tampa, 2008—2016 ...... 74 Table 25: Retail Market Profile—URA Study Area, 2008—2017 ...... 75 Table 26: Workplace/Office Potentials—Hillsborough County, 2016—2024 ...... 78 Table 27: Workplace/Office Potentials—URA Study Area, 2016—2024 ...... 80 WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 4 WTL+a
Table 28: Workplace/General Industrial Potentials—Hillsborough County, 2016—2024 ...... 84 Table 29: Workplace/General Industrial Potentials—URA Study Area, 2016—2024 ...... 85 Table 30: Annual Attendance & Supportable Retail—Busch Gardens, 2009—2017 ...... 89 Table 31: Estimated U.S. College Student Spending & Supportable Space ...... 91 Table 32: Hotel/Lodging Demand, 2012—2017...... 95 Table 33: Hotel/Lodging Potentials—URA Study Area, 2018—2027 ...... 96 Table 34: Potential Study Area Sites with Greatest Redevelopment Opportunity ...... 111
Figure 1: University Redevelopment Area Boundaries ...... 7 Figure 2: Study Area Within Tampa !p Boundaries ...... 8 Figure 3: Opportunity Zones in Hillsborough County ...... 15 Figure 4: Retail Leakage & Surplus—URA Study Area, 2017...... 26 Figure 5: Employment Density—URA Study Area, 2015 ...... 38 Figure 6: Employee Density—Adjacent to URA Study Area, 2015 ...... 39 Figure 7: Employee Inflow-Outflow—URA Study Area, 2015 ...... 39 Figure 8: CoStar Northeast Tampa Office Submarket ...... 50 Figure 9: CoStar Northeast Tampa/University Industrial Submarket ...... 57 Figure 10: Conceptual Redevelopment Plan—University Mall (“Uptown Tampa”) ...... 71 Figure 11: Redevelopment Opportunity Properties—Land Share of Total Just Value > 50% ... 107 Figure 12: Potential Study Area Sites with Greatest Redevelopment Opportunity ...... 110
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 5 WTL+a
1 Executive Summary
Introduction WTL+a, a national real estate and economic development consulting firm based in Washington, DC, with significant project experience throughout Florida, was retained by the Hillsborough County Department of Economic Development to prepare a market analysis of redevelopment opportunities in an area of unincorporated Hillsborough known as the University Redevelopment Area (URA). The County identified the following key objectives to help frame the market study:
. Consider how the study area fits into the goals and objectives guiding the Tampa Innovation Partnership’s (formerly the Tampa Innovation Alliance) recently-created “!p” strategy as well as the historic University Area Community Development Corporation (UACDC), which is focused on community and resident needs;
. Encourage redevelopment efforts that contribute to the economic prosperity of the County’s residents, especially residents of this study area; and
. Support existing companies, employers and institutions located in the larger Innovation District to create a place that is greater than the sum of its parts.
Study Area Boundaries As illustrated in Figure 1 below, the University Redevelopment Area comprises approximately 730 acres and multiple land uses based on land use and property appraiser data provided by the County. As noted, the study area is located within a much larger geography served by the Tampa Innovation Alliance (Innovation Place/!p) and the UACDC, and is generally bounded by the following major corridors:
. I-275 to the west
. E. Fowler Avenue and Fletcher Avenue to the south
. Bruce B. Downs Boulevard and N. 46th Street to the east, and
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 6 WTL+a
. Bearrs Avenue to the north.
The study area comprises approximately 729.6 gross acres of land and 461 property owners. There are approximately 602 buildings across multiple land use categories.
Figure 1: University Redevelopment Area Boundaries
As illustrated in Figure 2, the URA study area is located within the much larger geographic boundaries of the Tampa !p (Tampa Innovation Partnership—formerly the Tampa Innovation Alliance), which extends from I-275 on the west to I-75 on the east and Busch Boulevard on the south to Bearrs Avenue on the north. Tampa !p encompasses approximately 19 square miles and includes parts of the City of Tampa, the City of Temple Terrace and unincorporated Hillsborough County.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 7 WTL+a
Figure 2: Study Area Within Tampa !p Boundaries
Market Study Methodology Hillsborough County identified several key tasks to be completed as part of the market study:
. Prepare a data and analytical profile of existing “workplace” (i.e., office/general industrial) and supporting commercial/retail uses, including building inventories, occupancy and leasing/absorption trends to inform an evaluation of vacancy and building obsolescence to inform redevelopment potentials;
. Estimate market/redevelopment potentials for workplace (i.e., office/general industrial) uses and provide a market overview of supporting retail and lodging/hospitality uses;
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 8 WTL+a
. Analyze redevelopment potentials on parcels where land values exceed 50% of total market/just values; and
. Prepare a preliminary business and development strategy to:
o Guide County initiatives and strategies for economic development
o Understand the factors driving value and investment in the study area
o Outline recruitment within general industry/business sectors, and
o Determine whether the County’s existing toolkit of economic development incentives are applicable and appropriate for this study area.
As a result, the market study has been tailored to focus a greater level of detail on workplace uses in the business and development strategy, and to a lesser degree (as possible) for the less detailed evaluation of retail and lodging/hospitality uses. To that end, the study includes a profile of demographic and economic characteristics; an evaluation of recent and current real estate market conditions across key land uses (workplace/office, general industrial, supporting retail and lodging/hospitality); and, an analysis of market potentials that take into consideration the findings of the demographic and real estate analysis.
WTL+a notes that an analysis of the URA study area’s housing stock was not included as part of the market study.
Stakeholder Interviews A key component of the market study included conducting a series of interviews with stakeholders identified by Hillsborough County to:
. Obtain information on market performance and other characteristics of the study area’s real estate market and assess views of specific real estate metrics—competitive product, absorption potentials, target markets, commercial rents/pricing, leasing activity, etc.;
. Understand the impacts generated by several large institutions and employers located in (or adjacent to) the study area, including the University of South Florida-Tampa, Moffitt Cancer Center, University Mall, Tampa Innovation Alliance, Florida Hospital and others;
. Outreach to the UACDC, local citizens and residents of the surrounding neighborhood to ensure that resident concerns are addressed in the market study; and
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 9 WTL+a
. Ascertain local opinions about strengths and weaknesses of the study area to gauge market response to locational characteristics, potential uses, timing/phasing, etc. to inform market findings and development potentials.
Interviews were conducted with the following individuals as part of our project initiation trip/site analysis on January 31st and February 1st:
January 31, 2018
Ms. Barbara Donerly & Mr. Ray Gonzales University of South Florida
Ms. Allison Madden & Ms. Valerie McDevitt USF Research Park
Advisory Board Tampa Innovation Alliance
Citizen Focus Group UACDC
February 1, 2018
Business Focus Group Commercial developers/brokers
Ms. Sarah Combs Executive Director, UACDC
Mr. Chris Bowen University Mall/RD Management
Mr. Jack Kolosky COO, Moffitt Cancer Center
Ms. Lauren Campbell Equity LLC
Study Area Land Uses Based on data provided by Hillsborough County, Table 1 highlights existing workplace and commercial land uses in the study area. Distinctions are noted below:
. Light Industrial—encompasses 152.5 acres and 44 property owners. There are 154 buildings containing over 1,288,600 sq. ft. of gross building area. In 2017, industrial land was valued at over $17.5 million ($2.64 per sq. ft. of land), while buildings were valued at $39,476,600 ($30.64 per sq. ft.—GBA). The combined taxable value for light industrial is almost $52.1 million, or 14% of the study area’s total taxable value;
. Commercial Office—comprises 69.9 acres and 134 property owners. There are 93 office buildings containing 961,900 sq. ft. of gross building area. In 2017, commercial office land was valued at $21.7 million ($7.12 per dirt foot), while office buildings were valued at WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 10 WTL+a
over $85.8 million ($89.27 per sq. ft.—GBA). The combined taxable value for commercial office is $84.2 million, or 22% of the study area’s total taxable value;
. Commercial Retail—is the largest land use in the study area, occupying 466.8 acres and 258 property owners. There are 270 retail buildings or centers containing 3,556,700 sq. ft. of space. In 2017, retail land was valued at $94,198,500 ($4.63 per dirt foot), while retail buildings were valued at over $161.2 million ($45.34 per sq. ft.—GBA). The combined taxable value for commercial retail uses is $229.8 million, or 61% of the study area’s total taxable value; and
. Mixed-use—occupies the smallest land area, with 40.3 acres of land valued at $6.76 million ($3.85 per dirt foot). There are 25 property owners, and 85 mixed-use buildings containing 283,600 sq. ft. of uses and valued at $6.04 million ($21.33 per sq. ft.—GBA). The combined taxable value of mixed-use properties in the study area in 2017 was $13.1 million, accounting for 3% of the study area’s total values.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 11 WTL+a
Table 1: URA Study Area—Summary of Existing Land Uses, 2017
Parcel Data Building Data Use As % No. of No. of Land Area As % of Land Value Per Bldg. Area As % of Building Value Per Taxable of Total DOR Land Use Group Owners Buildings (Acres) Total Area Value SF-Land (SF) Total SF Value SF Value Tax. Value
Light Industrial 44 154 152.52 21% $ 17,510,911 $ 2.64 1,288,611 21% $ 39,476,616 $ 30.64 $ 52,084,838 14% Office - Office Condominium 3 - - 0% $ 300 - 6,352 0.1% $ 432,934 $ 68.16 $ 433,234 0% - Commercial Office 82 93 69.93 10% 21,697,410 7.12 879,320 14% 78,944,737 89.78 77,445,271 20% - Medical Office Condominium 49 - - 0% 4,900 - 76,219 1% 6,486,800 85.11 6,356,596 2% Subtotal - Office: 134 93 69.93 10% $ 21,702,610 $ 7.12 961,891 16% $ 85,864,471 $ 89.27 $ 84,235,101 22%
Commercial Retail - Commercial/Office 94 121 139.77 19% $ 26,045,932 $ 4.28 545,736 9% $ 30,781,419 $ 56.40 $ 54,192,125 14% - Cooperative (Common Area) 12 - 18.58 3% 1,200 0.00 - 0% - - 1,200 0% - Commercial Recreation 1 2 27.92 4% 348,425 0.29 4,908 0% 106,601 21.72 493,586 0% - Institutional (Fitness Center) 1 2 1.38 0% 256,951 4.27 7,628 0% 558,496 73.22 842,913 0% - Unknown/Invalid Code 15 16 1.63 0% 828,699 11.67 31,511 1% 1,968,808 62.48 2,829,886 1% - Store/Shopping Center 102 129 253.96 35% 62,485,476 5.65 2,966,917 49% 127,848,151 43.09 165,149,540 44% - Vacant 33 - 23.56 3% 4,231,808 4.12 - 0% - - 6,343,515 2% Subtotal - Commercial Retail: 258 270 466.80 64% $ 94,198,491 $ 4.63 3,556,700 58% $ 161,263,475 $ 45.34 $ 229,852,765 61%
Mixed-use 25 85 40.35 6% $ 6,767,862 $ 3.85 283,589 5% $ 6,047,949 $ 21.33 $ 13,138,242 3%
TOTAL - ALL PARCELS: 461 602 729.60 100% $ 140,179,874 $ 4.41 6,090,791 100% $ 292,652,511 $ 48.05 $ 379,310,946 100% Overall Density (Floor Area Ratio/FAR) 0.19
Source: Hillsborough County Property Appraiser; Hillsborough County Department of Economic Development; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 12 WTL+a
Preliminary Market Potentials Building upon the demographic profile in Section 2 and real estate market conditions in Section 3, our analysis of preliminary market potentials suggests the following:
Multi-tenant/Speculative Office Up to 232,000 SF (8 Years)
General Industrial/Planned Business 180,000 to 275,000 SF (8 Years)
Hotel/Lodging In Equilibrium/Limited Near-term Demand
Supporting Retail/Food Service Limited (Contingent on Redevelopment of University Mall)
Potential Sites with Greatest Redevelopment Opportunity WTL+a reviewed a selected group of properties included and, in several cases, in addition to the properties identified where land values exceed just values of 50% or greater. Conventional redevelopment opportunity sites are based on established principles of real estate value potentials—including:
. Lower land costs . Visibility and access to high traffic roadways and arterial routes . Access to active rail lines (particularly for selected industrial uses) . Availability of infrastructure/power/other utilities . Assembled site size . Proximity to adjacent sites for larger site assemblies, etc.
In considering these criteria, WTL+a reviewed County Property Appraiser assessment data and evaluated the degree to whether certain sites meet the other criteria listed above. Based on our review of the criteria and County data and mapping, five sites were determined to meet most or all criteria for potential redevelopment. For the University Redevelopment Area, WTL+a recommends that underlying property values should be the first determinant in catalyzing new (private) investments in the URA.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 13 WTL+a
A comparative analysis of property values per square foot was used to determine which sites might be considered the most ‘undervalued’, with other criteria balanced against site size, assembled property and status of current use. As illustrated in Section 5 (Table 34), we identified 11 candidate sites with an overall just/market value of $3.93 per sq. ft. of land. However, in our view, there are five sites that best meet the requirements for potential redevelopment. These five sites have considerably lower market values—with an average of $1.44 per sq. ft.
We also note that Hillsborough County has a new incentive program which could be used in the URA/!p district. Established as part of the Federal tax reform act in late 2017, the Opportunity Zones Program was created to attract long-term capital to rural and low-income urban communities, using tax incentives to encourage private investment in local impact funds. As illustrated in Figure 3, portions of the URA/!p district are included in one of Hillsborough County’s designated Opportunity Zones.
We understand that specific guidelines for implementation beyond designation are still being developed by the U.S. Department of Treasury, with an anticipated implementation period beginning in either the fourth quarter of 2018 or the first quarter of 2019. Section 5 includes further detail about the Opportunity Zones Program as well as a detailed explanation of current redevelopment incentives.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 14 WTL+a
Figure 3: Opportunity Zones in Hillsborough County
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 15 WTL+a
Table 2: Parcels with Land Values > 50% of Just Values
Parcel Data Land Value Selected DOR No. of Land Area As % of Land Value Per Just/Market As % of Land Use Group Parcels (Acres) Total Area Value SF-Land Value Just Value
Commercial/Office 81 93.4 19% $ 17,411,097 $ 4.28 $ 24,719,643 70% Commercial Recreation 1 27.9 6% 348,425 0.29 493,586 71% Government 73 85.1 17% 4,046,807 1.09 4,606,095 88% Heavy Industrial 3 2.1 0% 327,953 3.59 353,968 93% Institutional 28 40.1 8% 8,020,346 4.59 9,700,384 83% Invalid Code/Unknown 23 15.0 3% 1,200,765 1.84 1,567,459 77% Landscape/Wall Buffer 6 0.1 0% 43,022 7.60 67,511 64%
Light Industrial 15 81.3 16% 6,829,147 1.93 10,032,242 68% Mobile Homes 3 0.7 0% 61,627 2.18 92,656 67% Multi-family 11 8.3 2% 891,619 2.47 1,375,274 65% Schools/Colleges 5 1.9 0% 410,148 4.93 691,746 59% Single-family 23 13.2 3% 1,546,447 2.70 2,353,918 66% Store/Shopping Center 40 83.2 17% 20,936,860 5.78 32,111,124 65% Utility Right-of-Way 10 20.3 4% 1,456,008 1.64 2,031,604 72% Vacant Acreage 5 1.2 0% 112,182 2.18 112,182 100% Vacant Commercial 32 19.3 4% 3,836,808 4.57 3,870,056 99%
TOTAL - ALL PARCELS: 359 493.1 100% $ 67,479,261 $ 3.14 $ 94,179,448 72%
Source: Hillsborough County Property Appraiser; Hillsborough County Department of Economic Development; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 16 WTL+a
2 Demographic & Economic Profile
The following evaluates those indices that drive fundamental market demand for workplace, retail and lodging uses to inform redevelopment potentials in the URA study area. This section of the report focuses on population and household growth, employment trends and forecasts, household incomes and annual retail spending power, the current business mix in Hillsborough County and the study area, and other economic indicators based on available data that form the basis of potential market support for such uses.
This profile and analysis is based on data from various secondary public and private sources, including: U.S. Census Bureau and Environmental Protection Agency; Hillsborough County; University of Florida Bureau of Business & Economic Research; ESRI Business Analyst; Dun & Bradstreet, Inc.; and other sources.
Demographic Trends & Forecasts WTL+a evaluated historic population patterns and growth forecasts in the study area, the county’s three incorporated municipalities, and in Hillsborough County using the sources above. Key findings are summarized below, with data illustrated in the accompanying tables.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 17 WTL+a
Table 3: Hillsborough County Population Trends & Forecasts, 2000—2040
% of % of 1-Apr % of Change: 2000-2017 Forecasts (3) Change: 2017-2040 2000 County 2010 County 2017 County Amount CAGR (2) 2020 2030 2040 Amount CAGR (2) Population Hillsborough County 998,948 1,229,226 1,379,302 380,354 1.9% 1,466,900 1,722,900 1,919,900 540,598 1.4%
Plant City 29,915 3.0% 34,721 2.8% 38,297 2.8% 8,382 1.5% 40,729 47,837 53,307 15,010 Tampa 303,447 30.4% 335,709 27.3% 373,058 27.0% 69,611 1.2% 396,751 465,990 519,273 146,215 Temple Terrace 20,918 2.1% 24,541 2.0% 26,411 1.9% 5,493 1.4% 28,088 32,990 36,762 10,351 Unincorporated 644,668 64.5% 834,255 67.9% 941,536 68.3% 296,868 2.3% 1,001,332 1,176,082 1,310,558 369,022
(1) Based on the 2016-2045 Low-Medium-High Population Forecasts prepared by BEBR. Analysis uses the Moderate Growth Scenario for Hillsborough County. (2) CAGR=Compound Annual Growth Rate. (3) Municipal population forecasts for 2020-2040 assume that each municipality (and the unincorporated area) in Hillsborough maintains its 2017 share of the County's population.
Source: U.S. Census Bureau; University of Florida, Bureau of Business & Economic Research; ESRI Business Analyst; WTL+a, February 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 18 WTL+a
Hillsborough County
. As illustrated in Table 3 above, Hillsborough County’s population increased—from almost 999,000 residents in 2000 to more than 1.37 million residents in 2017, reflecting significant population growth of more than 380,300 over the past 17 years. This represents sustained annual growth of 1.9% per year;
. Unincorporated areas of Hillsborough County gained the lion’s share of new population. In fact, these areas captured fully 78% of the County’s population growth since 2000—with growth of almost 296,900 new residents. In 2000, unincorporated areas accounted for 64% of the County’s total. By 2017, unincorporated areas comprised over 68% of the total County population;
Since 2000, Hillsborough County Added
380,300+ New Residents
. Based on the Moderate Growth scenario of long-term population forecasts through 2040 (prepared by the University of Florida/Bureau of Economic & Business Research/BEBR), Hillsborough County is expected to add another 540,600 new residents, which translates into an annual growth rate of 1.4% per year, for a 2040 population of 1,919,900 residents; and
. If the unincorporated areas continue to maintain their 2017 share of the County’s population through 2040, this could translate into more than 369,000 new residents, for a 2040 population of 1,310,500.
Other notable demographic trends and forecasts for Hillsborough County are illustrated in Table 4 below:
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 19 WTL+a
Table 4: Demographic Trends & Forecasts—Hillsborough County, 2000—2022
Change: 2017-2022 2000 2010 2017 % Dist. 2022 % Dist. No. CAGR % Demographic Profile Population 998,970 1,229,226 1,382,695 1,502,045 119,350 1.67% Households 391,364 474,030 528,136 571,717 43,581 1.60% Avg. HH Size 2.51 2.55 2.57 2.59 Median Age 36.0 37.1 37.5 Race White 876,137 955,260 69% 1,014,448 68% 59,188 1.2% Black 205,073 235,490 17% 259,661 17% 24,171 2.0% American Indian 4,779 5,807 0% 6,657 0% 850 2.8% Asian, Pacific Islander 43,001 58,056 4% 71,828 5% 13,772 4.3% Other 61,554 77,926 6% 90,017 6% 12,091 2.9% Two or More Races 38,682 50,156 4% 59,434 4% 9,278 3.5% Total: 1,229,226 1,382,695 1,502,045 119,350 Hispanic (1) 306,635 389,759 28% 462,905 31% 73,146 3.5%
Age Distribution 0-14 243,031 256,461 19% 275,695 18% 19,234 1.5% 15-24 180,020 191,919 14% 196,252 13% 4,333 0.4% 25-34 173,877 204,610 15% 227,502 15% 22,892 2.1% 35-44 174,342 180,491 13% 200,502 13% 20,011 2.1% 45-54 178,058 183,182 13% 180,544 12% (2,638) -0.3% 55-64 134,661 167,806 12% 180,749 12% 12,943 1.5% 65-74 79,772 117,105 8% 141,011 9% 23,906 3.8% 75+ 65,465 81,121 6% 99,790 7% 18,669 4.2%
Income Profile Households by Income <$15,000 1.2% 10.9% $15,000 - $24,999 1.1% 9.7% $25,000 - $34,999 1.0% 8.9% $35,000 - $49,999 1.4% 12.0% $50,000 - $74,999 1.9% 18.2% $75,000 - $99,999 1.2% 14.1% $100,000 - $149,999 1.2% 14.4% $150,000 - $199,999 0.5% 5.7% $200,000+ 0.5% 6.1% Average HH Income $ 76,087 $ 86,825 2.7% Median HH Income $ 53,117 $ 59,333 2.2%
Education Profile 25 & Older, Years of Education (2015 American Community Survey/ACS) Less than 9th Grade 4.9% 9th-12th Grade, No Diploma 7.6% High School Graduate (Includes Equivalency) 27.3% Some College, No Degree 20.2% Associate Degree 9.4% Bachelor's Degree 19.5% Graduate/Professional Degree 11.1%
(1) Persons of Hispanic origin are a subset of other race categories; therefore, totals do not add. http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF
Source: ESRI Business Analyst; American Community Survey; WTL +a, February 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 20 WTL+a
URA Study Area
As noted previously, an analysis of the URA study area’s housing stock was not included as part of the market study. However, specific demographic indicators (such as population and household growth and household retail spending patterns) of neighborhood residents will affect market potentials for such uses as retail and food service. The following summarizes key demographic characteristics of the study area, with key findings illustrated in Table 5:
. In 2017, data from ESRI Business Analyst suggests that the study area contains over 36,800 residents in 15,700 households, adding 3,300 new residents in 1,270 new households since 2010;
. Despite this growth, the study area’s share of Hillsborough County’s population has declined slightly over the past seven years—from 2.73% in 2010 to 2.67% in 2017;
. Since long-term forecasts at this finite level of geography are not available, ESRI’s five-year forecasts through 2022 suggest that the study area will continue to growth, adding almost 2,700 new residents in over 1,100 new households. As detailed below, some of forecast new growth is likely to be generated by continued growth in USF enrollment;
. ESRI forecasts further suggest that population growth will be greatest in three age cohorts over the next five years, including those ages 35-44, 65-74 and 75+. This is likely to translate into opportunities for specific types of housing, such as age-restricted and independent living/continuing care for older cohorts as well as housing for first-time and/or move-up buyers;
. A diverse population that is 44% White, 36% Black, and 34% Hispanic;
. A significantly younger population (particularly relative to Florida and Hillsborough County), with a median age of 27.7 years due to the presence of USF students. Median age is forecast to increase to 28.2 years by 2022;
. A generally lower middle-income area, with average household incomes in 2017 of $37,400 per year. Only 5% of households have annual incomes greater than $100,000 per year; and
. Average household incomes are forecast to increase by fully 3.0% per year over the next five years, to more than $43,300 by 2022. The study area’s average household incomes
. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 21 WTL+a
Table 5: Demographic Trends & Forecasts—URA Study Area, 2010—2022
Change: 2017-2022 2010 2017 % Dist. 2022 % Dist. No. CAGR % Demographic Profile Population 33,565 36,864 39,557 2,693 1.42% As % of County 2.73% 2.67% 2.63% Households 14,472 15,743 16,871 1,128 1.39% Avg. HH Size 2.21 2.24 2.25 Median Age 26.9 27.7 28.2 Race White 15,466 16,227 44% 16,940 43% 713 0.9% Black 12,031 13,336 36% 14,339 36% 1,003 1.5% American Indian 218 267 1% 310 1% 43 3.0% Asian, Pacific Islander 1,181 1,493 4% 1,785 5% 292 3.6% Other 3,288 3,865 10% 4,279 11% 414 2.1% Two or More Races 1,381 1,677 5% 1,904 5% 227 2.6% Total: 33,565 36,865 39,557 2,692 Hispanic (1) 10,537 12,678 34% 14,519 37% 1,841 2.7%
Age Distribution 0-14 6,141 6,681 18% 7,085 18% 404 1.2% 15-24 9,193 9,440 26% 9,940 25% 500 1.0% 25-34 6,470 7,274 20% 7,442 19% 168 0.5% 35-44 3,510 3,924 11% 4,587 12% 663 3.2% 45-54 3,287 3,369 9% 3,451 9% 82 0.5% 55-64 2,091 2,717 7% 2,990 8% 273 1.9% 65-74 997 1,496 4% 1,868 5% 372 4.5% 75+ 1,876 1,964 5% 2,193 6% 229 2.2%
Income Profile Households by Income <$15,000 30.4% 29.1% -0.9% $15,000 - $24,999 18.3% 17.0% -1.5% $25,000 - $34,999 15.0% 13.7% -1.8% $35,000 - $49,999 13.4% 12.5% -1.4% $50,000 - $74,999 12.3% 13.4% 1.7% $75,000 - $99,999 5.4% 7.6% 7.1% $100,000 - $149,999 3.5% 4.6% 5.6% $150,000 - $199,999 0.8% 1.0% 4.6% $200,000+ 0.9% 1.1% 4.1%
Average HH Income $ 37,401 $ 43,377 3.0% Median HH Income $ 25,642 $ 27,257 1.2%
(1) Persons of Hispanic origin are a subset of other race categories; therefore, totals do not add.
Source: U.S. Census Bureau; American Community Survey; ESRI Business Analyst; WTL +a, February 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 22 WTL+a
are forecast to remain well-below their counterparts across Hillsborough County—$86,800 in 2022.
Household Incomes & Retail Spending Household retail spending is the primary driver of demand for retail space such as shopping centers, “Big Box” stores such as Wal-Mart or Target, food & beverage, and specialty or destination retail projects. Household retail spending patterns among households in Hillsborough County and the URA study area are illustrated in Table 6.
. With 2017 average annual household incomes of $37,400, households in the study area are less affluent than their counterparts elsewhere in Hillsborough County, where average household incomes are more than $76,000. This suggests less disposable income and spending potentials among study area households. However, forecast growth in study area incomes—3.0% per year—is expected to be above the rate of inflation, suggesting real growth in income over the next five years;
. Households in the URA study area spend an average of less than $9,100 per year on consumer retail goods, including clothing, entertainment/recreation, electronics, groceries, food & beverage, household furnishings and health care. By comparison, households across Hillsborough County spend significantly more—over $17,900 per year;
. Retail spending generally comprises between 23% and 25% of average household incomes among all households; and
. Retail spending among households in the URA study area totals over $153 million per year, as compared to $9.46 billion per year for all County households. Household spending in the study area accounts for less than 2% of the countywide total. Notably, household spending totals are irrespective of location (i.e., spending can occur anywhere).
Annual Household Retail Spending in the Study Area:
$153.3 Million Per Year
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 23 WTL+a
Table 6: Annual Household Consumer Spending, 2017
Hillsborough URA County Boundaries
Total Households (2017) 528,136 16,871
Apparel & Accessories Men's Wear $ 404 $ 212 Women's Wear 705 366 Children's Wear 333 177 Footwear 450 231 Watches & Jewelry 113 56 Apparel Products & Services 81 38 Subtotal: $ 2,084 $ 1,079
Computers Computers & Hardware $ 170 $ 95 Software & Accessories 34 16 Subtotal: $ 204 $ 111
Entertainment & Recreation Membership Fees for Clubs $ 196 $ 88 Fees for Participant Sports 96 40 Tickets to Theater/Operas/Concerts 55 27 Tickets to Movies/Museums/Parks 76 40 Admission to Sporting Events 52 25 Fees for Recreational Lessons 125 52 Dating Services 0.85 0.55 Subtotal: $ 602 $ 274
TV/Video/Audio Cable & Satellite TV Services $ 899 $ 482 Televisions 117 63 Satellite Dishes 1 1 VCRs, Video Cameras & DVD Players 6 4 Miscellaneous Video Equipment 9 4 Video Cassettes & DVDs 15 8
Video Game Hardware/Accessories 29 18 Video Game Software 16 10
Streaming/Downloaded Video 26 15 Rental of Video Cassettes & DVDs 15 9
Installation of Televisions 1 0 Audio 84 42
Rental & Repair of TV/Radio/Audio 4 3 Subtotal: $ 1,224 $ 658
(1) Consumer spending data are derived from the 2014 and 2015 Consumer Expenditure Surveys
conducted by the Bureau of Labor Statistics. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 24 WTL+a
Table 6 (Continued): Annual Household Consumer Spending, 2017
Hillsborough URA County Boundaries
Other Entertainment Pets $ 545 $ 239 Toys & Games 115 59 Recreational Vehicles & Fees 90 32 Sports/Recreation/Exercise Equipment 161 74 Photo Equipment & Supplies 54 26 Reading 115 56 Catered Affairs 29 11 Subtotal: $ 1,110 $ 497
Food & Alcohol Food at Home $ 4,809 $ 2,558 Food Away from Home 3,240 1,675 Alcoholic & Non-alcoholic Beverages 532 273 Subtotal: $ 8,581 $ 4,506
Household Furnishings & Equipment Household Textiles $ 91 $ 47 Furniture 559 283 Floor Coverings 21 10 Major Appliances 298 123 Housewares 90 43 Small Appliances 46 25 Luggage 11 5 Telephones & Accessories 69 36 Lawn & Garden 374 138 Housekeeping Supplies 674 331 Maintenance & Remodeling Materials 343 115 Subtotal: $ 2,577 $ 1,155
Health & Personal Care Non- & Prescription Drugs $ 470 $ 219 Optical 86 41 Personal Care Products 450 232 School Supplies 153 87 Smoking Products 386 233 Subtotal: $ 1,546 $ 812
TOTAL: Total Annual Spending $ 9,468,284,893 $ 153,373,080
Per Household $ 17,928 $ 9,091 As % of Average HH Income 23.6% 24.3%
(1) Consumer spending data are derived from the 2014 and 2015 Consumer Expenditure Surveys conducted by the Bureau of Labor Statistics.
Source: US Department of Labor, Bureau of Labor Market Statistics; ESRI Business Analyst; WTL+a, February 2018. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 25 WTL+a
Retail “Recapture” Opportunities Another key indicator of retail market potentials involves what is known as “retail opportunity gap”. This compares annual household spending (i.e., “demand”) in specific merchandise categories against estimated annual retail sales by businesses in those same categories (i.e., “supply”). The difference between demand and supply represents the “recapture” opportunity, or surplus, available in each retail category in the reporting geography.
When demand is greater than supply, there is an apparent opportunity for additional retail space in that category. By comparison, when demand is less than supply, there is a surplus of sales in that retail category (i.e., positive value in green = recapture opportunity, while a negative value in red = surplus of sales, or “inflow” of sales from outside of the reporting geography). Findings for the study area are illustrated in Table 7.
Figure 4: Retail Leakage & Surplus—URA Study Area, 2017
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 26 WTL+a
Table 7: Retail “Recapture” Opportunities—URA Study Area, 2017
Demand Supply "Recapture" Retail Category (HH Spending) (Store Sales) Opportunity
General Merchandise Stores Department Stores Excl Leased Depts. $ 30,792,966 $ 214,579,772 $ (183,786,806) Other General Merchandise Stores 13,381,751 8,800,481 4,581,270 Subtotal: $ 44,174,717 $ 223,380,253 $ (179,205,536)
Clothing & Accessories Stores Clothing Stores $ 9,250,564 $ 32,218,207 $ (22,967,643) Shoe Stores 2,112,601 20,202,889 (18,090,288) Jewelry, Luggage, Leather Goods 2,231,672 6,514,079 (4,282,407) Subtotal: $ 13,594,837 $ 58,935,175 $ (45,340,338)
Furniture & Home Furnishings Stores Furniture Stores $ 5,435,148 $ 4,599,264 $ 835,884
Home Furnishing Stores 3,612,968 1,236,621 2,376,347 Subtotal: $ 9,048,116 $ 5,835,885 $ 3,212,231
Electronics & Appliance Stores Appliances, TVs, Electronics Stores $ 7,593,414 $ 8,391,500 $ (798,086) Subtotal: $ 7,593,414 $ 8,391,500 $ (798,086)
Leisure & Entertainment Sporting Goods/Hobby/Musical Instruments $ 5,131,734 $ 24,674,322 $ (19,542,588) Books, Periodicals & Music Stores 1,300,156 3,640,769 (2,340,613) Subtotal: $ 6,431,890 $ 28,315,091 $ (21,883,201)
Food Services & Drinking Places Special Food Services $ 473,080 $ 81,334 $ 391,746 Drinking Places - Alcoholic Beverages 2,097,937 835,616 1,262,321 Restaurants/Other Eating Places 26,154,035 75,152,724 (48,998,689)
Subtotal: $ 28,725,052 $ 76,069,674 $ (47,344,622)
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 27 WTL+a
Table 7 (Continued): Retail “Recapture” Opportunities—URA Study Area, 2017
Demand Supply "Recapture" Retail Category (HH Spending) (Store Sales) Opportunity
Food & Beverage Stores Grocery Stores $ 44,216,701 $ 49,351,399 $ (5,134,698) Specialty Food Stores 2,058,953 3,023,803 (964,850) Beer, Wine & Liquor Stores 2,279,393 5,601,603 (3,322,210)
Subtotal: $ 48,555,047 $ 57,976,805 $ (9,421,758)
Health & Personal Care Stores Health & Personal Care Stores $ 16,867,140 $ 42,825,096 $ (25,957,956) Subtotal: $ 16,867,140 $ 42,825,096 $ (25,957,956)
Building Material, Garden Equipment Stores Building Materials & Supplies $ 12,712,414 $ 4,857,314 $ 7,855,100 Lawn & Garden Equipment & Supplies 956,923 1,255,399 (298,476)
Subtotal: $ 13,669,337 $ 6,112,713 $ 7,556,624
Miscellaneous Store Retailers Florists $ 322,919 $ 387,447 $ (64,528) Office Supplies, Stationery, Gift Stores 2,225,093 9,146,525 (6,921,432) Used Merchandise Stores 2,547,754 4,886,376 (2,338,622) Other Miscellaneous Retail Stores 5,387,206 7,012,400 (1,625,194) Subtotal: $ 10,482,972 $ 21,432,748 $ (10,949,776)
TOTAL: HH Demand vs. Retail Sales $ 199,142,522 $ 529,274,940 $ (330,132,418) (2)
(1) Claritas' "Retail Market Power" data is derived from two major sources of information. Demand data are derived from Consumer Expenditure Surveys fielded by the U.S. Bureau of Labor Statistics (BLS). Supply data are derived from the Census Bureau. The difference between demand and supply represents the "recapture opportunity", or surplus, available for each retail category in the reporting geography. When demand is greater than supply, there is an apparent opportunity for additional retail space in that category. By comparison, when demand is less than supply, there is a surplus of sales in that retail category (i.e., positive value = recapture opportunity, while negative value = surplus of sales). (2) Total household retail spending excludes spending on Non-Store Retailers (Internet); Motor Vehicle Parts and Dealers; and Gas Stations.
Source: Bureau of Labor Statistics; Claritas, Inc.; ESRI Business Analyst; WTL +a, February 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 28 WTL+a
Another source for household retail spending includes the Bureau of Labor Statistics (BLS) and Claritas, Inc. Key findings indicate that:
. These data sources indicate that study area households spend over $199 million per year. This estimate is higher than annual spending illustrated previously in Table 6 because it includes multiple additional merchandise categories such as Building Materials, Leisure & Entertainment and Miscellaneous Store sales. This compares to estimated study area store sales of over $529 million per year generated by the area’s sizable retail inventory. The difference between spending and sales is known as inflow; in other words, there is $330 million in annual retail sales inflow into the study area from sources other than resident households;
. As illustrated in Table 7, there are specific merchandise categories where apparent recapture opportunities due to leakage may be possible. These include: Other General Merchandise (department) Stores ($4.5 million per year), Furniture/Home Furnishings ($3.2 million) and Building Materials & Supplies ($7.8 million per year). These categories represent apparent recapture opportunities for new retail development in the study area. With sales leakage in Other General Merchandise and Furniture/Home Furnishings, these types of retail stores seek locations with critical mass/clustering with other retailers, which may be possible in specific locations of the study area (such as proximate to University Mall). As a result, understanding the planned redevelopment and remerchandising of University Mall is critical to determining whether household spending leakage in these categories can be recaptured.
The URA Study Area Generates $330 Million
In Annual Retail Sales Inflow
Economic Characteristics Employment Trends—Tampa/St. Petersburg/Clearwater MSA
Job growth is a key barometer of demand for “workplace” uses such as multi-tenant office space, industrial parks, retail centers and the like. WTL+a examined trends and forecasts in employment growth, utilizing data for the Tampa/St. Petersburg/Clearwater Metropolitan
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 29 WTL+a
Statistical Area (MSA) as prepared by the state’s labor agency, the Department of Economic Opportunity (DEO), for the period between 1995 and 2017. This data is critical to understanding market potentials in the study area. Key findings are summarized below and illustrated in Table 8:
. The MSA added a remarkable 241,700 new jobs in the 10-year period between 1995 and 2005. This growth, which translates into almost 25,000 new jobs annually, was focused largely in specific sectors, including: Professional/Business Services (97,300), Construction (35,200) and Financial Activities (31,800). Growth in Professional/Business Services has fueled demand for office space in key locations across the MSA during this period. Other sectors with solid job growth during this period also included: Retail Trade (18,700); Leisure & Hospitality (18,300); and Government (16,500);
The MSA Gained 241,700 Jobs (1995—2005) &
Lost 122,600 Jobs in the 2007—2009 Recession
. By contrast, the economic downturn of 2007—2009 resulted in the loss of 122,600 jobs throughout the MSA. Since 2005 (and over multiple economic cycles), job losses have been greatest in Construction (-19,700), Manufacturing (-11,400) and Information (-7,400);
. Since 2011, however, the economy of the Tampa Bay region has significantly recovered from the 2007—2009 recession, with the creation of 237,800 new jobs— recovering almost two times the number of jobs lost during the recession;
. Notably, the Services sector—which comprises multiple categories such as Business and Professional Services, Health, Education and Leisure/Hospitality, has gained the largest share of new jobs in the region, exhibiting a net gain of 108,000 new jobs between 2007 and 2017;
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 30 WTL+a
Table 8: Tampa/St. Petersburg/Clearwater MSA Employment Trends, 1995—2017
Change: 1995-2005 Change: 2007-2017 Industry Sector 1995 2000 2005 Amount CAGR % 2007 2009 2011 2013 2015 2017 Amount CAGR %
Logging & Mining 400 500 800 400 7.2% 700 500 500 400 300 200 (500) -11.8% Construction 57,000 68,800 92,200 35,200 4.9% 82,200 55,200 52,900 58,500 64,700 72,500 (9,700) -1.2% Manufacturing 79,700 88,700 78,500 (1,200) -0.2% 73,800 58,300 59,100 60,800 62,200 67,100 (6,700) -0.9% Transp/Warehousing/Utilities 33,200 37,500 32,200 (1,000) -0.3% 29,800 25,900 27,300 28,600 31,700 32,600 2,800 0.9% Trade Wholesale 51,000 57,400 53,600 2,600 0.5% 54,800 46,700 47,800 49,600 52,400 53,200 (1,600) -0.3% Retail 138,900 155,800 157,600 18,700 1.3% 156,700 140,800 147,500 155,000 163,600 170,600 13,900 0.9% Information 29,800 40,900 32,200 2,400 0.8% 31,300 26,500 26,200 26,000 25,800 24,800 (6,500) -2.3% Financial Activities 72,400 94,300 104,200 31,800 3.7% 101,800 90,800 94,200 101,300 106,500 116,200 14,400 1.3% Services Prof'l/Business Services 93,100 167,100 190,400 97,300 7.4% 193,300 169,600 188,000 201,200 228,500 240,900 47,600 2.2% Education/Health Services 143,800 143,700 159,600 15,800 1.0% 173,400 178,600 182,800 187,100 202,100 209,600 36,200 1.9% Leisure & Hospitality 111,200 117,400 129,500 18,300 1.5% 130,900 118,800 123,200 134,400 146,500 155,100 24,200 1.7% Other Services 42,100 45,100 47,000 4,900 1.1% 48,600 42,400 40,600 43,300 43,000 46,300 (2,300) -0.5% Government 134,200 147,900 150,700 16,500 1.2% 155,000 155,600 155,100 154,400 155,100 158,400 3,400 0.2%
Total (In 000s): 986,800 1,165,100 1,228,500 241,700 2.2% 1,232,300 1,109,700 1,145,200 1,200,600 1,282,400 1,347,500 115,200 0.9% Change During Period: - 178,300 63,400 3,800 (122,600) 35,500 55,400 81,800 65,100
(1) As of year-end for each reported year. http://floridajobs.org/labor-market-information/data-center/statistical-programs/current-employment-statistics
Source: Florida Department of Economic Opportunity; WTL +a, February 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 31 WTL+a
. As illustrated in Table 9, Dun & Bradstreet, Inc. estimates that Hillsborough County contained approximately 619,500 full-time jobs in 45,700+ registered businesses in 2016, which reflects a jobs-to-population ratio of 0.45. That is, there is almost one-half a job for every one of the 1,382,700 residents in the County and reflects the concentration of larger employment centers such as downtown Tampa, Westshore, and Brandon; and
. The County’s 619,500 jobs comprise 46% of the 1.32 million jobs in the MSA.
Hillsborough County Accounts for 46%
of All Jobs in the Tampa—St. Petersburg MSA
Employment Trends & Forecasts—Hillsborough County
Employment forecasts for specific jurisdictions in Florida (defined as Workforce Development Regions) are also prepared by the Department of Economic Opportunity in eight-year forecast periods. As illustrated in Table 10, these forecasts suggest that:
. Hillsborough County (DEO Workforce Region #15) is expected to add more than 84,300 new jobs between 2016 and 2024, reflecting a sustained annual pace of 10,500 new jobs annually over this eight-year period; and
. The Services sector is expected to comprise more than 45% of all new jobs in the county— adding almost 49,900 new jobs—with the largest gains expected in Health Care, Professional and Business Services and Administrative sectors. This could be expected to fuel demand for office space and medical office buildings.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 32 WTL+a
Table 9: Business Mix—Hillsborough County, 2017
Businesses Employees NAICS Category No. % of Total No. % of Total
Agriculture & Mining 831 1.8% 6,455 1.0% Construction 2,939 6.4% 25,012 4.0% Manufacturing 1,247 2.7% 33,270 5.4% Transportation & Warehousing 1,153 2.5% 15,397 2.5% Communications 474 1.0% 6,805 1.1% Utilities 86 0.2% 2,760 0.4% Wholesale & Retail Trade Wholesale 1,862 32,660 Retail 9,454 138,504 - Home Improvement 585 8,335 - General Merchandise 330 14,984 - Food Stores 1,015 20,346 - Auto Dealers/Gas Stations 1,141 13,222 - Apparel & Accessory Stores 653 5,989 - Furniture/Home Furnishings 700 7,712 - Eating & Drinking Places 2,740 49,241 - Miscellaneous & Non-store Retail 2,290 18,675 Subtotal - All Retail: 11,316 24.7% 171,164 27.6% Finance/Insurance/Real Estate 5,074 11.1% 55,329 8.9% Services - Hotel/Lodging 279 8,601 - Automotive Services 1,438 8,345 - Motion Pictures & Amusements 1,392 13,951 - Health Services 3,182 69,129 - Legal Services 1,305 12,279 - Educational Institutions 882 52,861 - Other Services 11,230 112,985 Subtotal - Services: 19,708 43.1% 278,151 44.9% Government 681 1.5% 23,952 3.9% Unclassified Establishments 2,227 4.9% 1,251 0.2%
TOTAL: 45,736 100.0% 619,546 100.0%
ANALYSIS: 2017 Employment 619,546 2017 Population 1,382,695
Jobs/Population Ratio 0.45
Source: ESRI Business Analyst; InfoGroup, Inc.; Dun & Bradstreet, Inc.; WTL +a, February 2018. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 33 WTL+a
Table 10: State Employment Forecasts for Hillsborough County, 2016—2024
Change: 2016-2024 Employment Category 2016 % Dist. 2024 % Dist. Total CAGR
Agriculture/Mining/Construction Agriculture/Forestry 9,041 8,788 (253) -0.4% Mining 171 170 (1) -0.1% Construction 36,000 42,292 6,292 2.0% Subtotal: 45,212 6.0% 51,250 6.1% 6,291 1.6%
Manufacturing Durable Goods Manufacturing 14,924 15,628 704 0.6% Non-Durable Goods Manufacturing 9,506 9,416 (90) -0.1% Subtotal: 24,430 3.3% 25,044 3.0% 614 0.3%
Transportation & Warehousing Utilities 2,672 2,726 54 0.3% Transportation & Warehousing 18,016 19,029 1,013 0.7% Subtotal: 20,688 2.8% 21,755 2.6% 1,067 0.6%
Wholesale & Retail Trade Wholesale Trade 34,043 36,416 2,373 0.8% Retail Trade 74,801 80,878 6,077 1.0% Subtotal: 108,844 14.5% 117,294 14.1% 8,450 0.9%
Information 17,073 2.3% 16,553 2.0% (520) -0.4%
Financial Activities Finance & Insurance 54,584 59,804 5,220 1.1% Real Estate, Rental & Leasing 13,140 15,076 1,936 1.7% Subtotal: 67,724 9.0% 74,880 9.0% 7,156 1.3%
Services Professional, Scientific & Technical Services 63,074 75,957 12,883 2.4% Management of Companies & Enterprises 11,199 13,476 2,277 2.3% Administrative & Waste Management 61,353 67,034 5,681 1.1% Educational Services 12,655 15,642 2,987 2.7% Health Care & Social Assistance 80,180 94,822 14,642 2.1% Arts, Entertainment & Recreation 12,173 13,460 1,287 1.3% Accommodation & Food Services 63,624 70,942 7,318 1.4% Other Services (Except Government) (1) 26,264 29,081 2,817 1.3% Subtotal: 330,522 44.1% 380,414 45.6% 49,892 1.8%
Government 84,273 11.2% 91,247 10.9% 6,974 1.0%
Self-Employed & Unpaid Family Workers 49,387 6.6% 54,305 6.5% 4,918 1.2%
Unclassified Jobs (Data Reconciliation) 1,403 0.2% 1,116 0.1% (287) -2.8%
TOTAL: 749,556 833,858 84,302 1.3% Annual Increase (Rounded): 10,500
(1) Other Services includes Repair & Maintenance, Personal & Laundry and Membership Associations. http://www.floridajobs.org/labor-market-information/data-center/statistical-programs/employment-projections
Source: Florida Department of Economic Opportunity; WTL +a, February 2018. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 34 WTL+a
Employment Trends—URA Study Area
. As illustrated in Table 11, Dun & Bradstreet, Inc. estimates that there are more than 21,990 jobs in over 1,100 registered businesses in the study area. The study area accounts for approximately 3.6% of the 619,500 full-time jobs in Hillsborough County;
. The three largest sectors generating demand for workplace real estate in the study area include: Health Services (11,200 jobs generated by the presence of Florida Hospital, Moffitt Cancer Center and the VA Hospital), Retail Trade (4,700 jobs) and Other Services (2,200+ jobs). Together, these three sectors account for almost 18,200 jobs, or fully 83% of the 21,900 jobs in the study area. “Other Services” includes such industries as automotive repair and maintenance;
. As noted, the study area contains 3.6% of all at-place jobs in Hillsborough County. This is known as fair share, and has been considered in our analysis of workplace market potentials in Section 4 of this report;
. The data also suggest that the study area’s current jobs-to-population ratio is 0.60 (i.e., there is two-thirds of a job for every resident living in the study area). This ratio is higher than the County (0.45);
. As illustrated in Table 12, U.S. Census Bureau data indicate that the study area’s employment base has recovered from the impacts of the 2007—2010 recession, when over 1,000 jobs were lost. Since 2010, job growth in the study area has been highly uneven. For example, in 2010, over 4,000 new jobs were created in Health Care, but many of those jobs were lost in 2011 and 2012. Since 2013, however, the study area has exhibited a net gain of over 5,200 new jobs. (We note that differences between Dun & Bradstreet/Table 11 and U.S. Census Bureau/Table 12 are attributed to part-time, self-employed and those jobs not contributing to the Unemployment Insurance Fund);
. In fact, Health Care gained the largest number of new jobs (6,000+), followed by Retail Trade (825) and Accommodations & Food Services (450+);
The URA Study Area Gained
5,600+ New Jobs between 2006 & 2015 WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 35 WTL+a
Table 11: Business Mix—URA Study Area, 2017
Businesses Employees NAICS Category No. % of Total No. % of Total
Agriculture & Mining 10 0.9% 65 0.3% Construction 50 4.4% 477 2.2% Manufacturing 21 1.8% 585 2.7% Transportation & Warehousing 17 1.5% 54 0.2% Communications 19 1.7% 68 0.3% Utilities 1 0.1% 18 0.1% Wholesale & Retail Trade Wholesale 30 194 Retail 350 4,687 - Home Improvement 6 40 - General Merchandise 18 1,166 - Food Stores 39 330 - Auto Dealers/Gas Stations 42 555 - Apparel & Accessory Stores 47 338 - Furniture/Home Furnishings 13 97 - Eating & Drinking Places 101 1,565 - Miscellaneous & Non-store Retail 84 595 Subtotal - All Retail: 380 33.4% 4,881 22.2%
Finance/Insurance/Real Estate 119 10.5% 654 3.0% Services - Hotel/Lodging 7 77 - Automotive Services 57 214 - Motion Pictures & Amusements 27 146 - Health Services 166 11,221 - Legal Services 5 32 - Educational Institutions 12 200 - Other Services 200 2,268 Subtotal - Services: 474 41.7% 14,158 64.4% Government 14 1.2% 1,017 4.6% Unclassified Establishments 32 2.8% 20 0.1%
TOTAL: 1,137 100.0% 21,997 100.0%
ANALYSIS: 2017 Employment 21,997 As Share of Hillsborough County 3.6% 2017 Population 36,864 Jobs/Population Ratio 0.60
Source: ESRI Business Analyst; InfoGroup, Inc.; Dun & Bradstreet, Inc.; WTL +a, February 2018. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 36 WTL+a
Table 12: 10-Year Employment Trends—URA Study Area, 2006—2015
National Recession Change: 2006-2015 Industry Sector 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 % Dist. Amount CAGR %
Agriculture & Mining - - - - - 2 1 1 2 - 0.0% - N/A Construction 1,143 881 700 711 440 486 464 453 564 718 3.3% (425) -5.0% Manufacturing 262 238 197 143 94 106 127 141 136 131 0.6% (131) -7.4% Transp & Warehousing 60 57 42 6 29 30 46 30 47 25 0.1% (35) -9.3% Utilities - 2 4 4 1 5 3 2 2 - 0.0% - N/A Trade Wholesale 272 393 381 422 302 336 346 356 469 221 1.0% (51) -2.3% Retail 2,714 2,519 2,431 2,305 1,941 2,145 2,813 3,028 2,874 3,576 16.7% 862 3.1% Information 314 243 219 209 185 215 179 164 165 263 1.2% (51) -2.0% Finance & Insurance 109 120 113 144 145 198 167 256 239 159 0.7% 50 4.3% Real Estate/Rental & Leasing 296 345 417 440 263 300 294 296 330 257 1.2% (39) -1.6% Services Prof'l/Business Services 496 514 531 565 611 591 564 525 578 235 1.1% (261) -8.0% Management of Companies 12 17 18 28 19 18 30 44 45 107 0.5% 95 27.5% Administration/Waste Mgmt. 1,565 800 711 682 599 566 495 595 628 740 3.5% (825) -8.0% Educational Services 31 30 25 45 41 184 201 227 205 194 0.9% 163 22.6% Health Care & Social Assistance 6,655 6,947 7,075 7,190 11,265 10,939 8,631 11,491 11,835 12,684 59.1% 6,029 7.4% Arts/Entertainment/Recreation 138 135 136 100 52 44 97 87 96 88 0.4% (50) -4.9% Accommodation & Food Services 1,367 1,447 1,408 1,482 1,321 1,376 1,386 1,473 1,574 1,821 8.5% 454 3.2% Other Services 309 336 301 218 191 196 241 247 238 225 1.0% (84) -3.5% Public Administration/Gov't 81 87 90 83 450 122 102 116 95 - 0.0% (81) -100.0%
Total (In 000s): 15,824 15,111 14,799 14,777 17,949 17,859 16,187 19,532 20,122 21,444 5,620 3.4% Annual Change: - (713) (312) (22) 3,172 (90) (1,672) 3,345 590 1,322 Annual % Change: - -5% -2% 0% 21% -1% -9% 21% 3% 7%
Study Area As % of County: 2.6% 2.4% 2.4% 2.6% 3.2% 3.0% 2.8% 3.2% 3.2% 3.2% 10-Year Avg: 2.9%
Source: U.S. Census Bureau, On-the-Map; WTL +a, February 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.885.9121 301.502.4171 774.538.6070 37 WTL+a
. Figure 5 below illustrates the highest employment densities, which are in the center of the study area proximate to the intersection of East Fletcher Avenue and Bruce B. Downs Boulevard. Not surprisingly, this is the location of the area’s major employers—USF, Florida Hospital Tampa, Shriners Hospital for Children, James A. Haley Veteran’s Hospital and H. Lee Moffitt Cancer Center;
. Figure 6 below depicts employment densities immediately adjacent to the study area boundaries, encompassing the campus of USF as well as commercial development along Fowler Avenue and McKinley Drive; and
Figure 5: Employment Density—URA Study Area, 2015
. As illustrated in Figure 7 below, the Census Bureau estimates that the major employers located in the study area generate greater employee in-flow (almost 20,500 per day) than outflow (11,200 per day), with fewer than 1,000 employees working and living in the study area.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 38 WTL+a
Figure 6: Employee Density—Adjacent to URA Study Area, 2015
Figure 7: Employee Inflow-Outflow—URA Study Area, 2015
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 39 WTL+a
USF Enrollment Trends
The University of South Florida Tampa campus is part of the University of South Florida System, which comprises three institutions—Tampa, St. Petersburg and Sarasota/Manatee. According to the Carnegie Classification of Institutions of Higher Education, USF Tampa is classified as “Doctoral Universities: Highest Research Activity”. Founded in 1956, the university has 14 colleges offering 80 undergraduate majors and more than 130 graduate, specialist and doctoral-level degree programs. In 2015, the university had an annual budget of $1.5 billion and a reported annual economic impact of over $3.7 billion.
For purposes of the market study, USF students, faculty and administrative staff represent a potentially important source of market support, particularly for commercial retail and food service. As a result, WTL+a examined trends in student enrollment and faculty and staff employment. Key findings based on available data are illustrated in Table 13 and summarized below:
. Since 2014, student enrollment has increased—from 41,888 to more than 43,500 students for this school year. This reflects an overall increase of 3.9%. Notably, full-time enrollment jumped by 7.6%, with 31,900+ full-time students that comprise fully 73% of total enrollment. Part-time enrollment dropped by 4.9%, to 11,615. Full-time undergraduates comprise 56% of total student enrollment, while full-time graduate students comprise 14%;
. While faculty and administrative positions have increased, there has been a significant decline in total reported employment—from 16,500 in 2014 to 14,000 in 2018:
. Full-time faculty positions increased, and now represent 15% of USF’s total jobs
. Part-time faculty, other faculty and administrative support positions decreased
. Administrative positions expanded—from 2,085 in 2014 to 2,391 in 2018—an increase of almost 15%, and
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 40 WTL+a
Table 13: USF Enrollment & Employment Trends, 2014—2018
2014-2015 2017-18 Change: Enrollment % of Total Enrollment % of Total 2014-2018 Students Undergraduate Full-time 23,452 56% 24,403 56% 4.1% Part-time 6,872 16% 6,581 15% -4.2% Graduate Full-time 4,939 12% 6,173 14% 25.0% Part-time 4,196 10% 3,913 9% -6.7% Medicine Full-time 658 2% 700 2% 6.4% Part-time - 0% - 0% 0.0% Non-Degree Seeking Full-time 626 1% 651 1% 4.0% Part-time 1,145 3% 1,121 3% -2.1%
TOTAL-STUDENTS: 41,888 43,542 3.9% Full-time 29,675 71% 31,927 73% 7.6% Part-time 12,213 29% 11,615 27% -4.9%
Faculty & Administration Instructional Faculty Full-time 1,625 10% 1,699 12% 4.6% Part-time 118 1% 107 1% -9.3% Other Faculty Full-time 468 3% 432 3% -7.7% Part-time 22 0% 30 0% 36.4% Administrative Full-time 2,085 13% 2,391 17% 14.7% Part-time 40 0% 37 0% -7.5% University Support Full-time 1,892 11% 1,790 13% -5.4% Part-time 37 0% 29 0% -21.6% Other Full-time 2,802 17% 509 4% -81.8% Part-time 969 6% 953 7% -1.7% Part-time Adjuncts 1,211 7% 1,268 9% 4.7% Graduate Assistants 2,056 12% 2,058 15% 0.1% Student Assistants 2,864 17% 2,710 19% -5.4% Full-time Post-doctoral Appointees 322 2% - 0% -100.0%
TOTAL-FACULTY (1): 16,511 14,013 -15.1% Full-time 9,194 56% 6,821 49% -25.8% Part-time 7,317 44% 7,192 51% -1.7%
(1) Total faculty in 2014 excluded the 322 Post-doctoral Appointees, for a total faculty estimate of 16,189. www.usf.edu/pdfs/usf-facts-2014-15.pdf
Source: University of South Florida, USF System Facts; WTL+a, March 2018. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 41 WTL+a
. Other full-time positions (not defined) dropped sharply—from 2,802 in 2014 to 509 in 2018, reflecting a decrease of over 81%. The reasons for this decrease are not known.
According to University data, there are 34 on-campus residence halls offering traditional, suite and apartment style housing. These residential facilities provide housing to more than 5,600 students. In addition, USF also offers specialized housing options such as family housing, female-only housing, graduate student housing and “Greek Village”, which provides an estimated 340 beds for fraternities and sororities. In 2009, the university implemented a new policy requiring all first-year, full-time undergraduate students to live on campus. The goal of the policy is to provide new students with a comprehensive educational experience. Students exempt from this new rule include those who remain living with their parents and/or legal guardians within Hillsborough, Pasco and Pinellas Counties, are above the age of 21 by the first day of fall classes, have a dependent child or family member, or are married.
In addition to on-campus housing, USF has formal relationships with five off-campus properties. Though the university has no ownership or management role in these entities, it recommends these alternative options based on proximity to the campus and amount of USF students residing there. These properties include:
. Campus Club
. The Province
. 40 Fifty Lofts
. The Flats at 4200, and
. Avalon Heights
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 42 WTL+a
3 Real Estate Market Conditions
WTL +a evaluated real estate market conditions for selected land uses in the study area and in other selected, competitive locations in Hillsborough County to understand how recent market trends, current economic conditions, and future growth affect opportunities for redevelopment in the University Redevelopment Area. This analysis is considered a critical component when testing overall market potentials that will inform and guide the use of the County’s redevelopment incentives as well as appropriate land use and zoning policies in the study area.
This section of the report analyzes historic and current building inventory, occupancy and vacancy levels, annual absorption (leasing) activity, historic development trends, and other appropriate market indices for workplace (professional office and general industrial), supporting commercial (retail) and lodging/hospitality uses based on available data. Key findings are summarized below and illustrated in Table 14 through Table 23.
Hotel/Lodging WTL+a reviewed data on market conditions for hotel and lodging uses in the study area and nearby locations based on performance data provided by STR Global, the industry leader in hotel market data. Performance metrics from this analysis serve as the basis for determining market potentials for new hotels in the study area. Notably, the study area has several key locational advantages that should serve to benefit hotel/lodging uses. These include:
. Primary commercial corridors with high traffic counts
. Ready access to I-275, including visibility and frontage on several possible redevelopment parcels
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 43 WTL+a
. Captive demand generators and destinations in the form adjacent major employers, such as USF, Florida Hospital, Moffitt Cancer Center and the VA Hospital, and
. Adjacency to a major tourism attraction, Busch Gardens, which attracts over four million annual visitors.
In larger population centers and communities with established commercial office concentrations, hotels can serve as an important supporting amenity to corporate and business activity generators, for tourism destinations and for nearby residential clusters.
Hotel quality levels are generally determined by the depth and sustainability of support from available market segments. In areas with lower spending potentials or more price-sensitive consumers (such as logistics-related markets serving truck drivers and others), market potentials may be best met by a limited-service property (which is defined by the hotel industry to include no on-site restaurant, and limited other amenities such as gyms, meeting/conference/event spaces, swimming pools, spas, etc.) as opposed to higher-priced hotel categories (such as full-service business-oriented hotels, which include all of the above amenities) or destination resort properties oriented toward beaches/waterfronts, golf courses, etc.
As illustrated in Table 14, Hillsborough County contains over 22,000 hotel rooms in multiple submarkets across the County. According to STR Global, the study area is in the USF/Busch Gardens submarket, and contains 1,592 hotel rooms, accounting for a 7.2% share of the County’s room inventory. The USF/Busch Gardens submarket is the County’s third largest, after the Airport/Westshore and Downtown/Ybor City. (The submarket defined as “Other” comprises multiple properties in scattered locations across the County).
To understand this competitive context, WTL+a identified the most competitive hotel locations in the USF/Busch Gardens and nearby Tampa North submarkets. As illustrated in Table 15, we selected 20 competitive properties containing just over 2,300 hotel rooms within an easy drive of the study area. These properties account for 10.5% of Hillsborough County’s total inventory.
Hotel occupancies are a principal source of information on business and leisure visitor markets, and measures of demand for hotel development follow general industry patterns that identify markets as ready to add more room capacity. The general thresholds used in the capital markets to test growth capacity for new hotel rooms include:
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 44 WTL+a
Table 14: Hillsborough County Hotel Inventory, 2018
Number of Rooms by Property Class Upper Upper Total As % of Location Economy Mid-Scale Mid-scale Upscale Upscale Luxury Rooms County City of Tampa (1) (2) (3) (4) (5) (6) Airport/Westshore 824 432 1,217 1,865 1,707 - 6,045 27.4% Other 1,383 1,112 248 655 833 442 4,673 21.2% Downtown/Ybor City 198 - 238 475 2,442 - 3,353 15.2% USF/Busch Gardens 304 486 429 126 247 - 1,592 7.2% Fairgrounds 443 226 752 - - - 1,421 6.4% Tampa North - 206 320 286 - - 812 3.7% Subtotal - Tampa: 3,152 2,462 3,204 3,407 5,229 442 17,896 81.2%
Other Municipalities Temple Terrace 223 - 174 148 - - 545 2.5% Plant City 174 - 307 - - - 481 2.2% Subtotal - Other: 397 - 481 148 - - 1,026 4.7%
Unincorporated Hillsborough County Brandon 410 288 701 792 147 - 2,338 10.6% Ruskin 20 56 - 157 - - 233 1.1% Seffner 120 - 158 - - - 278 1.3% Sun City Center - 80 75 - - - 155 0.7% Lutz - 110 - - 110 0.5% Subtotal - Unincorporated: 550 424 934 1,059 147 - 3,114 14.1%
TOTAL Hillsborough County: 4,099 2,886 4,619 4,614 5,376 442 22,036 100.0% % Distribution by Class 18.6% 13.1% 21.0% 20.9% 24.4% 2.0%
(1) Examples of economy class hotel properties include: Day's Inn; Extended Stay America; Red Roof Inn; Super 8 and Travelodge (2) Examples of mid-scale class properties include: Best Western; La Quinta Inn; Quality Inn; Sleep Inn & Suites and Wingate by Wyndham (3) Examples of upper mid-scale class properties include: Comfort Inn; Fairfield Inn; Hampton by Hilton and Holiday Inn Express & Suites (4) Examples of upscale class properties include: Marriott Courtyard; Crowne Plaza; Doubletree; Hilton Garden Inn; Hyatt Place and Residence Inn (5) Examples of upper upscale class properties include: Hyatt; Marriott; Sheraton; Westin and Wyndham (6) Examples of luxury class properties include: Grand Hyatt Tampa Bay
Source: STR Global; RDS LLC; WTL+a, March 2018.
. Average Daily Rates (or ADRs), and
. Average annual occupancy levels (allowing for possible seasonal changes).
Notably, the hotel industry considers average annual occupancy between 65% and 72% as a break-even threshold necessary to support additional capacity and warrant development of new hotel rooms.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 45 WTL+a
Table 15: Selected Competitive Hotel Inventory
Opening No. of % of STR Facility/Location Date Rooms Supply Market Data Economy Super 8 Tampa USF Nov 1999 105 4.6% Yes Econo Lodge Busch Gardens Jun 1980 99 4.3% Yes Subtotal - Economy: 204 8.9%
Midscale Baymont Inn & Suites Tampa/Busch Gardens Aug 1989 150 6.5% Yes LaQuinta Inn & Suites USF/Busch Gardens Dec 1997 109 4.7% Yes LaQuinta Inn & Suites Tampa/Busch Gardens Jun 1984 144 6.3% Yes Ramada Temple Terrace Tampa North Oct 1989 122 5.3% Yes La Quinta Inns & Suites Tampa North I-75 Aug 1999 84 3.6% Yes Sleep Inn Busch Gardens USF Tampa Dec 1997 83 3.6% Yes Subtotal - Midscale: 692 30.0%
Upper Midscale Holiday Inn Express & Suites USF Busch Gardens Oct 2008 123 5.3% Yes Holiday Inn & Suites Tampa North/Busch Gardens Dec 1985 116 5.0% Yes Holiday Inn Express & Suites 1-75 @ Bruce B Downs Mar 2003 100 4.3% Yes Hampton Inn Tampa Busch Gardens Apr 2017 84 3.6% Yes Home2 Suites Tampa USF/Busch Gardens Sep 2017 106 4.6% Yes Embassy Suites Tampa/USF/Busch Gardens Jan 1998 247 10.7% Yes Hampton Inn & Suites Tampa North Dec 1997 126 5.5% Yes TownePlace Suites Tampa North I-75 Fletcher Jul 1999 94 4.1% Yes Subtotal - Upper Midscale: 996 43.2%
Upscale Hyatt Place Tampa Busch Gardens Jan 1997 126 5.5% Yes Springhill Suites Tampa North I-75 Tampa Palms Mar 2010 127 5.5% Yes Courtyard Tampa North I 75 Fletcher Jan 1995 81 3.5% Yes Residence Inn Tampa North I 75 Fletcher Mar 1997 78 3.4% Yes Subtotal - Upscale: 412 17.9%
TOTAL: 2,304 100.0% As % of Hillsborough County 10.5%
Source: STR Global; RDS LLC; WTL+a, April 2018.
Table 16 illustrates key performance metrics among the area’s competitive hotel properties.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 46 WTL+a
Table 16: Market Performance of Selected Competitive Hotel Properties, 2012—2017 CHANGE: 2012-2017 2012 2013 2014 2015 2016 2017 Average CAGR Performance Characteristics (1) Number of Rooms 2,126 2,126 2,114 2,114 2,304 2,304 Available Room Nights (Supply) 775,990 776,234 773,632 771,610 771,610 807,642 779,453 0.8% Occupied Room Nights (Demand) 468,945 454,730 493,234 536,969 530,241 567,817 508,656 3.9% Annual Occupancy (%) 60.4% 58.6% 63.8% 69.6% 68.7% 70.3% 65.3% 3.1% Average Daily Rate $ 84.17 $ 84.78 $ 89.54 $ 96.42 $ 103.28 $ 106.40 $ 94.74 4.8% (2) Revenue Per Available Room $ 50.87 $ 49.67 $ 57.09 $ 67.10 $ 70.97 $ 74.81 $ 61.83 8.0%
Year-to-Year % Growth Annual Occupancy - (3.1%) 8.8% 9.2% (1.3%) 2.3% Average Daily Rate - 0.7% 5.6% 7.7% 7.1% 3.0% Revenue/Available Room - (2.4%) 14.9% 17.5% 5.8% 5.4%
Selected Property Rooms % Dist. Year Open Embassy Suites Tampa/USF/Busch Gardens 247 10.7% Jan 1998 Baymont Inn & Suites Tampa/Busch Gardens 150 6.5% Aug 1989 LaQuinta Inn & Suites Tampa/Busch Gardens 144 6.3% Jun 1984 Springhill Suites Tampa North I-75 Tampa Palms 127 5.5% Mar 2010 Hampton Inn & Suites Tampa North 126 5.5% Dec 1997 Hyatt Place Tampa Busch Gardens 126 5.5% Jan 1997 Holiday Inn Express & Suites USF Busch Gardens 123 5.3% Oct 2008 Ramada Temple Terrace Tampa North 122 5.3% Oct 1989 Holiday Inn & Suites Tampa North/Busch Gardens 116 5.0% Dec 1985 LaQuinta Inn & Suites USF/Busch Gardens 109 4.7% Dec 1997 Home2 Suites Tampa USF/Busch Gardens 106 4.6% Sep 2017 Super 8 Tampa USF 105 4.6% Nov 1999 Holiday Inn Express & Suites 1-75 @ Bruce B Downs 100 4.3% Mar 2003 Econo Lodge Busch Gardens 99 4.3% Jun 1980 TownePlace Suites Tampa North I-75 Fletcher 94 4.1% Jul 1999 La Quinta Inns & Suites Tampa North I-75 84 3.6% Aug 1999 Hampton Inn Tampa Busch Gardens 84 3.6% Apr 2017 Sleep Inn Busch Gardens USF Tampa 83 3.6% Dec 1997 Courtyard Tampa North I 75 Fletcher 81 3.5% Jan 1995 Residence Inn Tampa North I 75 Fletcher 78 3.4% Mar 1997
Total: 2,304 100% As % of County's Hotel Inventory 10.5% (1) CAGR=Compound Annual Growth Rate. (2) Revenue per available room is total annual room revenue divided by available rooms. It is the best measure of year-to-year growth because it considers simultaneous changes in both room rate and annual occupancies.
Source: STR Global; RDS LLC; WTL+a, April 2018. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 47 WTL+a
. The 20 properties selected for this analysis fall within four (of six) industry designations identified by STR, including Economy, Midscale, Upper Midscale and Upscale
. Over the past six years, average annual occupancies increased from 60.4% in 2012 to 70.3% in 2017, which reflects a solid, compound annual growth rate of 3.1%
. While this rate of growth is significant, the primary metric is sustained average annual occupancy, which averaged 65.3% over this six-year period. This meets the minimum/threshold annual occupancies of 65% to 72% required to warrant capital market- based financing of new hotel construction. Notably, for the past three years, annual occupancies in these competitive properties ranged from 68% to 70%—well within the required range to support new hotel development, and
. Continued annual occupancy performance in this range (or higher) will be necessary to ensure that construction of any new hotel is financially viable. Our demand analysis of hotel potentials is illustrated in Section 4.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 48 WTL+a
Workplace: Office The market analysis includes an evaluation of “workplace” uses, including: multi- tenant/speculative office and general industrial (warehouse and distribution and other) real estate sectors, focusing on performance metrics in the Northeast Tampa submarket and the study area to:
. Understand the study area’s relative competitive position in the submarket for such uses based on data from various sources, including CoStar, Inc., a national real estate database, which includes the following key market indices: total inventory, construction deliveries, net absorption (i.e., leasing) activity, vacant stock, vacancy rates, and rental rates;
. Inform our evaluation of development opportunities for each of these uses in the University Redevelopment Area based on the findings of key metrics in this profile; and
. Outline the use of County redevelopment incentives tailored to specific locations/projects and guide land use and zoning policies to ensure that future private reinvestment in each of these sectors in the study area is successful.
Northeast Tampa
As illustrated in Figure 7, the study area is in the Northeast Tampa office submarket. Key findings (based on data from CoStar, Inc.) are summarized below:
. As illustrated in Table 17, Northeast Tampa contains almost 10.2 million sq. ft. of office space. Northeast Tampa is one of seven submarkets in Hillsborough County, and accounts for 15% of the 68.7 million sq. ft. of office space countywide. Since 2008, almost 662,000 sq. ft. of new office space has been built across the submarket;
. Over the past 10 years, office vacancies in Northeast have fluctuated, peaking at 17% in 2011 as recovery from the 2007—2009 recession was beginning. Notably, vacancies have declined—from their 17% peak in 2011 to 6.9% in 2017, yielding 704,200 sq. ft. of vacant office space across the submarket;
. By comparison, the countywide office vacancy rate at year-end 2017 was 6.7%, which translates into 4.86 million sq. ft. of vacant office space (including direct vacancies and sublet space);
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 49 WTL+a
Figure 8: CoStar Northeast Tampa Office Submarket
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 50 WTL+a
Table 17: Office Market Profile—Northeast Tampa Submarket, 2008—2017
National Recession Change: 2008-2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Ann'l Avg. % CAGR Office Inventory 9,735,202 9,876,990 9,876,990 9,890,690 9,890,690 9,897,690 10,014,727 10,099,703 10,124,835 10,154,835 419,633
No. of Buildings 231 240 240 242 242 243 244 245 247 248 Vacant Stock 1,410,552 1,548,430 1,469,880 1,759,816 1,527,763 1,320,504 1,474,811 1,047,204 768,386 704,161 (706,391) Vacancy Rate 14.5% 15.7% 14.9% 17.8% 15.4% 13.3% 14.7% 10.4% 7.6% 6.9% -7.9%
Total Net Absorption 200,288 3,910 78,550 (276,236) 232,053 214,259 (37,270) 512,583 303,950 94,225 1,326,312 132,631
Past 5 Years 1,087,747 217,549
Construction Deliveries 242,349 141,788 - 13,700 - 7,000 117,037 84,976 25,132 30,000 661,982 Gross Rent/SF $ 20.42 $ 20.33 $ 20.05 $ 19.54 $ 19.13 $ 18.79 $ 19.83 $ 19.91 $ 19.87 $ 20.74 0.2% Average Annual % Change -0.4% -1.4% -2.5% -2.1% -1.8% 5.5% 0.4% -0.2% 4.4% Base Rent/SF $ 19.56 $ 19.51 $ 18.84 $ 18.41 $ 18.26 $ 17.64 $ 18.39 $ 18.30 $ 18.17 $ 19.17 -0.2%
Source: CoStar, Inc.; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 51 WTL+a
Table 18: Class A Office Building Profile—Northeast Tampa Submarket, 2008—2017
National Recession Change: 2008-2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Ann'l Avg. % CAGR Office Inventory 3,736,620 3,736,620 3,736,620 3,736,620 3,736,620 3,736,620 3,853,657 3,938,633 3,938,633 3,968,633 232,013 No. of Buildings 21 21 21 21 21 21 22 23 23 24 Vacant Stock 604,826 603,022 531,146 598,406 591,275 507,525 508,794 516,198 252,361 239,039 (365,787) Vacancy Rate 16.2% 16.1% 14.2% 16.0% 15.8% 13.6% 13.2% 13.1% 6.4% 6.0% -10.4%
Total Net Absorption 46,180 1,804 71,876 (67,260) 7,131 83,750 115,768 77,572 263,837 43,322 643,980 64,398 Past 5 Years 584,249 116,850
Construction Deliveries 203,509 - - - - - 117,037 84,976 - 30,000 435,522 Gross Rent/SF $ 23.56 $ 23.29 $ 22.80 $ 22.81 $ 22.47 $ 22.40 $ 23.42 $ 23.17 $ 24.16 $ 25.36 0.82% Average Annual % Change -1.2% -2.1% 0.1% -1.5% -0.3% 4.5% -1.1% 4.3% 5.0% Base Rent/SF $ 23.71 $ 23.41 $ 22.80 $ 22.81 $ 22.49 $ 22.44 $ 23.44 $ 23.20 $ 24.15 $ 25.37 0.75%
Source: CoStar, Inc.; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 52 WTL+a
. Multiple factors have combined to strengthen overall leasing activity, including recovery from the 2007—2009 recession, net new job growth in office-using sectors and new or expanded businesses throughout Hillsborough County. In fact, since 2012 countywide net absorption has averaged over 1.05 million sq. ft. per year, and over the past three years countywide net absorption has strengthened—to 1.29 million sq. ft. per year; and
. In Northeast, net absorption among all office buildings has averaged over 132,600 sq. ft. per year over the past 10 years, with only two years of negative absorption in 2011 and 2014. More notably, over the past five years, net absorption has improved—to an annual average of 217,500 sq. ft. per year. If this annual five-year pace can be sustained, it would require approximately 3.01 years to reduce office vacancies to stabilized levels in the range of 7% vacancy (i.e., the real estate industry considers stabilized occupancies for office buildings to be in the range of 93% to 95%); and
. Office rents in Northeast average $20.74 per sq. ft. Rents have remained relatively unchanged over the past 10 years in the range of $20 per sq. ft. It is apparent that landlords are tracking net absorption closely—as rents have fluctuated up or down parallel to absorption trends.
URA Study Area
The URA study area is considered a secondary office location in the Northeast Tampa office submarket of Hillsborough County. As illustrated in Table 19, the study area’s office market is characterized by the following metrics:
. There are 100 office buildings of varying sizes ranging from small (“garden”) office buildings such as 14512 N. Nebraska Avenue (10,000 sq. ft.) to larger buildings such as 12206 Bruce B. Downs Blvd. (31,000 sq. ft.) to 3500 E. Fletcher Avenue/University Professional Center (98,700 sq. ft.). A significant portion of the study area’s office inventory is comprised of medical office buildings within the campuses of Florida Hospital, Moffitt Cancer Center and the VA Hospital;
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 53 WTL+a
Table 19: Office Market Profile—URA Study Area, 2008—2017
National Recession Change: 2008-2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Ann'l Avg. % CAGR Office Inventory 1,149,316 1,174,570 1,174,570 1,174,570 1,174,570 1,174,570 1,174,570 1,173,054 1,173,054 1,173,054 23,738 As % of NE Tampa 11.8% 11.9% 11.9% 11.9% 11.9% 11.9% 11.7% 11.6% 11.6% 11.6%
No. of Buildings 100 101 101 101 101 101 101 100 100 100 Vacant Stock 80,491 134,609 84,394 129,966 122,183 117,680 125,930 123,720 105,621 77,758 (2,733) Vacancy Rate 7.0% 11.5% 7.2% 11.1% 10.4% 10.0% 10.7% 10.5% 9.0% 6.6% -0.6%
Total Net Absorption 73,091 (28,864) 50,215 (45,572) 7,783 4,503 (8,250) 694 18,099 27,863 99,562 9,956 Past 5 Years 42,909 8,582
Construction Deliveries 13,160 25,254 ------38,414 Gross Rent/SF $ 20.04 $ 21.24 $ 22.19 $ 20.06 $ 19.53 $ 20.59 $ 20.96 $ 21.04 $ 21.34 $ 21.05 0.5% Average Annual % Change 6.0% 4.5% -9.6% -2.6% 5.4% 1.8% 0.4% 1.4% -1.4% Base Rent/SF $ 20.10 $ 18.57 $ 18.09 $ 18.39 $ 18.23 $ 18.28 $ 18.86 $ 18.05 $ 18.94 $ 18.48 -0.9%
Source: CoStar, Inc.; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 54 WTL+a
. Office tenants in the study area range from professional services to medical to administrative/accounting, attracted to the study area by reasonable rents and proximity to key demand generators and the area’s large employers;
. The study area contains an office inventory of 1.17 million sq. ft., which comprises slightly less than 12% of the 10.2 million sq. ft. Northeast Tampa submarket, and less than 2% of the County’s 68.5 million sq. ft. of office inventory;
. Vacancy rates peaked at 11.5% in 2009 and fluctuated in the range of 9% to 11% between 2012 and 2016. An uptick in recent leasing activity reduced vacancy rates to 6.6% in 2017. Over the past 10 years, net absorption totaled almost 100,000 sq. ft.—or roughly 9,950 sq. ft. per year. If this pace can be sustained, it would take over seven years to reduce the study area’s vacancy rate to 93%/stabilized levels. We note that this pace is likely insufficient to justify financing of new office buildings;
. We also examined longer-term trends in net office leasing activity in the study area. Since 1999, net absorption totaled 329,300 sq. ft., yielding an annual average of 17,300 sq. ft. per year over the past 19 years; and
. New construction over the past 10 years has delivered only 38,400 sq. ft. of new office space.
URA Study Area: A Secondary Office Market with Limited Leasing Activity
Average Annual Absorption: 9,950 SF Per Year
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 55 WTL+a
Workplace: General Industrial The following highlights key findings from our analysis of the area’s industrial market. Industrial uses can take many forms—from heavy industrial (such as chemical plants or oil tank farms) to manufacturing to assembly to warehousing/storage and freight and logistics uses. For purposes of the market study, general industrial includes manufacturing, service/flex, warehousing, and distribution (i.e., logistics) functions.
As illustrated in Figure 8, the study area is in the Northeast Tampa/University industrial submarket. Key findings for (based on data from CoStar, Inc.) are summarized below:
Northeast Tampa
. As illustrated in Table 20, Northeast Tampa contains 18.0 million sq. ft. of industrial space distributed between warehousing and distribution (12.6 million sq. ft./70%) and other (5.3 million sq. ft./30%). Other types of industrial space include food processing, manufacturing, refrigeration, service/showroom, telecom and truck terminal facilities;
. The submarket’s industrial vacancies have declined significantly from the 2007—2009 recession. From peak vacancies of 10.8% for warehousing and 11.5% for other, the amount of unoccupied industrial space in Northeast Tampa has declined to 636,000 sq. ft., or only 3.5% of total inventory in 2017;
. Over the past 10 years, net absorption totaled 607,800 sq. ft., equating to an annual average of 60,800 sq. ft. per year. Notably, over the past five years annual absorption more than quadrupled—to 264,800 sq. ft. per year. In effect, the Northeast industrial market is at stabilized levels/performance; and
. With 870,200 sq. ft. of new industrial space built since 2008 (including 755,000 sq. ft. of warehousing and distribution uses) and stabilized occupancies, market conditions are sufficiently feasible to support new construction.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 56 WTL+a
Figure 9: CoStar Northeast Tampa/University Industrial Submarket
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 57 WTL+a
Table 20: Industrial Market Profile—Northeast Tampa, 2008—2017
National Recession Change: 2008-2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Ann'l Avg. % CAGR Warehousing & Distribution Inventory 12,118,203 12,372,145 12,374,845 12,374,845 12,374,845 12,374,845 12,374,845 12,374,845 12,672,458 12,672,458 554,255
No. of Buildings 481 487 488 488 488 488 488 488 492 492 Vacant Stock 698,134 1,304,039 1,332,487 1,081,045 995,359 740,805 760,696 662,536 451,655 506,617 (191,517) Vacancy Rate 5.8% 10.5% 10.8% 8.7% 8.0% 6.0% 6.1% 5.4% 3.6% 4.0% -4.0%
Total Net Absorption (88,525) (351,963) (125,748) 251,442 52,400 254,554 (19,891) 98,160 508,494 (55,730) 523,193 52,319 Past 5 Years 785,587 157,117
Construction Deliveries 200,863 253,942 2,700 - - - - - 297,613 - 755,118 Gross Rent/SF $ 5.45 $ 5.59 $ 4.56 $ 4.30 $ 4.57 $ 5.07 $ 5.19 $ 4.81 $ 5.18 $ 5.75 0.6% Average Annual % Change 2.6% -18.4% -5.7% 6.3% 10.9% 2.4% -7.3% 7.7% 11.0% Base Rent/SF $ 4.83 $ 5.27 $ 4.05 $ 3.88 $ 4.08 $ 4.35 $ 4.74 $ 4.35 $ 4.57 $ 5.36 1.2%
All Other Industrial (1) Inventory 5,239,240 5,244,840 5,244,840 5,244,840 5,244,840 5,244,840 5,244,840 5,244,840 5,226,842 5,345,276 106,036 No. of Buildings 119 120 120 120 120 120 120 120 119 120 Vacant Stock 271,962 380,062 433,162 376,749 582,621 600,733 495,463 476,446 196,888 129,167 (142,795) Vacancy Rate 5.2% 7.2% 8.3% 7.2% 11.1% 11.5% 9.4% 9.1% 3.8% 2.4% -8.1%
Total Net Absorption (148,787) (102,500) (53,100) 56,413 (205,872) (18,112) 105,270 19,017 246,170 186,155 84,654 8,465 Past 5 Years 538,500 107,700
Construction Deliveries - 5,600 ------118,434 124,034 Gross Rent/SF $ 6.32 $ 4.98 $ 4.86 $ 4.93 $ 5.92 $ 4.75 $ 4.62 $ 4.74 $ 5.09 $ 5.08 -2.4% Average Annual % Change -21.2% -2.4% 1.4% 20.1% -19.8% -2.7% 2.6% 7.4% -0.2% Base Rent/SF $ 5.42 $ 4.42 $ 4.52 $ 4.25 $ 4.46 $ 4.55 $ 4.43 $ 4.55 $ 4.52 $ 4.07 -3.1% (1) Includes food processing, manufacturing, refrigeration, service/showroom, telecom and truck terminal facilities.
Source: CoStar, Inc.; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 58 WTL+a
URA Study Area
Like our analysis of the study area’s office market, WTL+a utilized data from CoStar, Inc. for a more detailed review of its industrial market. Key findings are illustrated in Table 21 and summarized below.
. CoStar data indicate that the study area contains 67 industrial buildings, including 52 warehousing/distribution buildings and 15 other industrial buildings primarily located along the N. Nebraska Avenue corridor and in adjacent/nearby blocks. Other metrics on the study area’s industrial market are as follows:
. There are 1,024,910 sq. ft. of industrial space, which is comprised of 867,300 sq. ft. (85%) of warehouses and 157,600 sq. ft. (15%) of other industrial uses. In total, the study area accounts for less than 7% of the Northeast Tampa industrial inventory. This share has held steady over the past 10 years;
. Like real estate sectors nationwide, the study area’s industrial inventory (particularly warehousing and distribution uses) was impacted by the 2007—2009 recession, with over (174,000 sq. ft.) of negative net absorption (i.e., contraction in occupied space) between 2009 through ongoing recovery in 2012. Notably, warehousing and distribution facilities were most affected by this contraction, with vacancies peaking at 18.2% in 2012. Over the past five years since 2013, ongoing job growth and business expansions have generated positive leasing activity of 126,300 sq. ft., with the lion’s share of activity concentrated in warehousing and distribution, averaging almost 25,000 sq. ft. per year.
. In conclusion, the study area’s industrial market is characterized by:
o Aging properties and limited new construction (only 23,300 sq. ft. since 2008)
o Fluctuating leasing activity strengthened by net absorption averaging 25,000 sq. ft. per year over the past five years, and
o Generally low (and uneven) rents in the range of $5 to $6 per sq. ft. that fluctuate up or down based on leasing activity.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 59 WTL+a
Table 21: Industrial Market Profile—URA Study Area, 2008—2017
National Recession Change: 2008-2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Ann'l Avg. % CAGR Warehousing & Distribution Inventory 849,611 849,611 849,611 849,611 849,611 849,611 849,611 849,611 867,311 867,311 17,700 As % of NE Tampa 7.0% 6.9% 6.9% 6.9% 6.9% 6.9% 6.9% 6.9% 6.8% 6.8% No. of Buildings 50 50 50 50 50 50 50 50 52 52 Vacant Stock 2,800 71,000 113,162 93,600 154,600 148,600 138,100 66,950 57,345 47,407 44,607 Vacancy Rate 0.3% 8.4% 13.3% 11.0% 18.2% 17.5% 16.3% 7.9% 6.6% 5.5% 36.6%
Total Net Absorption 21,578 (68,200) (42,162) 19,562 (61,000) 6,000 10,500 71,150 27,305 9,938 (5,329) (533) Past 5 Years 124,893 24,979
Construction Deliveries ------17,700 - 17,700 Gross Rent/SF $ 7.26 $ 3.79 $ 5.25 $ 5.26 $ 5.44 $ 4.77 $ 4.89 $ 6.32 $ 6.34 $ 5.46 -3.1% Average Annual % Change -47.8% 38.5% 0.2% 3.4% -12.3% 2.5% 29.2% 0.3% -13.9% Base Rent/SF $ 6.73 $ 3.79 $ 5.20 $ 5.22 $ 4.96 $ 4.04 $ 4.51 $ 6.05 $ 5.89 $ 5.34 -2.5%
All Other Industrial (1) Inventory 151,999 157,599 157,599 157,599 157,599 157,599 157,599 157,599 157,599 157,599 5,600 As % of NE Tampa 2.9% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 2.9% No. of Buildings 14 15 15 15 15 15 15 15 15 15 Vacant Stock - - 2,464 1,200 1,400 - 11,334 8,034 - - - Vacancy Rate 0.0% 0.0% 1.6% 0.8% 0.9% 0.0% 7.2% 5.1% 0.0% 0.0% 0.0%
Total Net Absorption 500 5,600 (2,464) 1,264 (200) 1,400 (11,334) 3,300 8,034 - 6,100 610 Past 5 Years 1,400 280
Construction Deliveries - 5,600 ------5,600 Gross Rent/SF N/A $ 12.69 $ 3.84 N/A $ 9.23 $ 18.67 $ 9.11 $ 9.11 $ 9.12 N/A N/A Average Annual % Change Base Rent/SF N/A N/A $ 3.84 N/A $ 9.23 $ 18.67 $ 18.67 $ 18.67 $ 18.67 N/A N/A
(1) Includes food processing, manufacturing, refrigeration, service/showroom, telecom and truck terminal facilities.
Source: CoStar, Inc.; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 60 WTL+a
General Retail WTL+a also evaluated retail uses in the study area. Retail is a significant land use—not only in the study area—but also in neighboring communities such as Temple Terrace. We completed both an overview and a detailed retail inventory of the study area; key findings of that analysis are illustrated in Table 22. This inventory is based on a combination of data from CoStar as well as a cursory property survey by WTL+a to incorporate information about retail uses not covered in the CoStar data.
The study area contains an estimated total retail inventory of almost 2.6 million sq. ft. (as of late 2017/early 2018) within its 730 acres. We note that fully 50% of total existing retail space in the study area is located at University Mall. Most of the study area’s retail supply is in three types of structures:
. Smaller free-standing retail buildings
. In-line store locations within small strip shopping blocks and centers, and
. At/around University Mall and its immediately area.
Major arterial roadways in the study area have developed as commercial corridor formats common across Florida—multi-lane roadways with commercial clusters at intersections and nodes, and sections of corridors where low-scaled retail pads and small centers with light industrial and residential uses are mixed. Major commercial arterials in the study area include:
. I-275
. East Fowler Avenue
. East Fletcher Avenue
. North Nebraska Avenue/SR 41
. Bruce B. Downs Boulevard
. North 46th Street, and
. Bearss Avenue
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 61 WTL+a
Table 22: Inventory of Retail, Vacant & Storefront Office Space—Study Area, 2018
No. of Total Area % Category Spaces (In SF) Distribution Retail
Department Store/Big Box 6 830,586 34.9% Specialty Retail 59 372,937 15.7% Auto Sales, Services & Parts 58 362,279 15.2% Food & Beverage/Restaurants 102 316,564 13.3% Consumer Services 95 271,022 11.4% Grocery Stores/Food Markets 23 172,817 7.3% Finance, Insurance & Real Estate (FIRE) 23 54,421 2.3% Subtotal - Retail Space: (1) 366 2,380,626 88.1%
Storefront Office & Other Uses Storefront Professional Office (2) 9 85,367 66.3%
Other/Non-retail (3) 7 43,441 33.7% Subtotal - Storefront Office & Other: 16 128,808 4.8%
Vacant Commercial Space Vacant Space 44 193,060 7.1%
TOTAL INVENTORY - Study Area: (4) 426 2,702,494 100.0%
(1) Total retail inventory may vary from CoStar data illustrated elsewhere in the report, as a portion of spaces in the inventory were not identified in CoStar data. (2) Storefront professional office includes non-FIRE office uses occupying storefront locations. (3) Other non-retail tenants include educational/schools, nurses training, recording studios, etc. (4) The study area's total inventory also includes non-retail uses such as storefront churches.
Source: CoStar, Inc.; RDS LLC; WTL+a, April 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 62 WTL+a
Because the study area’s boundaries traverse the middle of several of these roadways, we note that there is also additional retail on the south side of Fowler, Fletcher and Bearss Avenues that are not included in the summary. Particularly along East Fowler, there is a considerable amount of existing commercial retail that is considered part of the area’s existing supply, but which are not tabulated as part of this inventory. The pattern of existing retail offerings is almost exclusively auto-oriented, with surface parking lots in front of linear retail buildings with multiple tenants. This pattern is evolving nationally to favor more walkable environments, as demonstrated by the proposed redevelopment plan for University Mall (see below).
As a general comment, however, the retail character of almost all existing retail offerings in the study area is not pedestrian-friendly. This area of Tampa needs significant infrastructure improvements to better balance pedestrian safety with heavy traffic volumes, especially along major arterial roads. For example, road widths along E Fowler/State Route 582 in front of University Mall contain eight traffic lanes, plus central turn lanes and medians. For pedestrians, this requires crossing 230 feet of roadway, curb-to-curb (and 270 feet from sidewalk-to- sidewalk). Several narrower roads in the study area have sidewalks located adjacent to travel lanes, putting pedestrians immediately adjacent to through traffic lanes. Another primary arterial, N. Nebraska Avenue, is 70 feet curb-to-curb, with sidewalks next to passing vehicles. We also note than most of the residential side streets have no sidewalks at all.
For purposes of the analysis, the definition of ‘retail’ should be interpreted broadly and with many categories included as ‘retail’ uses. The retail categories in the inventory are:
. Specialty Retail—Smaller stores include both national brands and locally-owned businesses providing products such as apparel, shoes, gifts, jewelry, accessories, toys, household/home products, furniture and furnishings, books and music, art galleries, art supply stores, sports stores and supplies, antiques, rugs and carpets, consignment and thrift shops, kitchen stores, bicycle shops etc.
. Department /Big Box Stores—Traditional department and large format stores area generally between 50,000 and 150,000 sq. ft.; examples include Burlington Coat Factory, Grand’s, Macys; large format stores include Walmart and Super Walmart (such as the150,000 sq. ft. store on N Nebraska Avenue), Target, Home Depot/Lowe’s and, in the University Redevelopment Area, a large Salvation Army Thrift Store (of about 75,000 sq. ft.)
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 63 WTL+a
. Food & Beverage/Restaurants—Full-service and limited-service restaurants, cafes and coffee shops, ice cream and specialty prepared foods, bars and clubs selling wine, beers and liquors, specialty liquor and wine shops, chain-affiliated and locally owned fast-foot and carry-out food service locations, convenience stores (for this study, convenience stores at gas stations were counted as auto-related because the main retail activity at such locations is gasoline purchases), nightclubs serving alcohol, etc.
. Consumer Services—Hair and beauty salons, barber shops, nail salons, dry cleaning services, laundromats, delivery services (like Federal Express and United Parcel Service), business supply stores, newsstands, pharmacies and drug stores, printing shops, gyms and exercise businesses, yoga studios, tobacco shops and vape businesses, medical supplies, auto rental services, massage studios, movie theaters and other commercial entertainment venues including live performance, bike repair and maintenance, etc.
. Finance, Insurance & Real Estate (FIRE)—Banks, savings and loan businesses, credit unions, automatic teller machines, insurance offices located in storefront locations, realtors and real estate marketing offices, etc.
. Grocery Stores & Food Markets—Full-sized grocery stores, neighborhood markets, and specialty food stores such as meat stores, bakeries, etc.
. Automotive Sales & Supplies—Auto dealerships for new and used cars, auto repair and service shops, tires and auto parts, detailing and car audio systems, car washes etc. (only the building areas for these auto-related uses were included)
. Vacant—Street-front commercial spaces which are empty, vacant and available for lease, or vacant and for-sale spaces
In addition to the study area’s existing retail uses, WTL+a also compiled data on professional office uses and other non-retail uses located in what otherwise would be considered retail space (apart from a religious/work space in the former Dillard’s, which is slated for redevelopment as part of the University Mall re-positioning project). Professional office spaces are differentiated from service businesses classified as Finance/Insurance/Real Estate (FIRE), which can attract customer traffic that animates a retail environment. For purposes of this analysis, medical management, educational and religious (storefront churches) were included as office/non-retail, along with selected other occupants.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 64 WTL+a
Impacts of University Mall Redevelopment The largest retail presence in the URA study area is University Mall, originally opened in 1974 as University Square Mall. The original mall was anchored by department stores including Robinson’s of Florida, Maas Brothers, J.C. Penney and Sears. A fifth anchor was added a year later with Burdines. Paralleling the patterns with regional department stores nationally, most of the original stores no longer exist. Sears was the only original anchor use remaining when the site was sold in 2014 to RD Management, a New York-based retail developer and investment company.
The transition from opening to the mall’s decline in 2009 (when Starbucks closed its location) to its diminished status in 2015 (when another renovation was announced) reflect overall conditions of the shopping mall industry across the U.S. The 1.33 million sq. ft. super-regional mall (shopping malls totaling more than one million sq. ft. are defined as ‘super-regional’) was traditionally configured with a linear, interior central circulation spine connecting the anchor store locations.
University Mall at its most deteriorated state reflects the characteristics of retail centers located in less affluent areas, populated by residents/a customer base with less disposable income than other areas of Tampa. The mall is also challenged by the newer, more competitive retail centers elsewhere in greater Tampa, including Westfield Brandon Mall (1,136,000 sq. ft.), Westfield Citrus Park (1,000,000 sq. ft.) and International Plaza/Bay Street (1.2 million sq. ft.). While University Mall remains among the larger retail centers in greater Tampa, its competitive position has slipped with high vacancies and declining sales.
This is illustrative of the larger shopping industry shake-up across the U.S. that is transforming thousands of retail properties to better respond to changing shopping patterns. The impacts of on-line sales on traditional retail models is often cited as the reason that the U.S. retail industry is undergoing dramatic changes. While there is no doubt that on-line shopping has reduced store traffic nationally, particularly among Millennial-age shoppers, the underlying forces
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 65 WTL+a affecting retail are more complex. Among the reasons for changes in shopping patterns are the following:
As a general condition, the United States is oversupplied with retail space, both in shopping centers and in standalone retail stores, especially Big Box stores, which now have fewer available operators and more space than markets can support. It is estimated that the U.S has about 26 sq. ft. of retail space per capita; by comparison, European countries average about 2.5 sq. ft. per capita. Reflecting oversupply and changes in consumer preferences, the traditional shopping mall industry is undergoing a major transformation as well, affecting both large internally focused enclosed malls as well as traditional strip shopping centers.
According to a study by New York University, the United States more than doubled its total amount of shopping center space during the 30 years between 1980 and 2010, growing from 3.3 billion sq. ft. in 1980 to 7.2 billion sq. ft. by 2010, adding an average of 130 million sq. ft. of space per year during this period. This pace of growth added new retail space at a much faster rate than market-based support and consumer spending could sustain, even in rapid growth areas like Florida.
Because of this oversupply and liberal zoning laws, the retail real estate market is in flux, both nationally and in Florida. According to the International Council of Shopping Centers (ICSC), about one-third of existing shopping malls in the U.S. will close over the next 10 years due to overbuilding/too much competition, declining sales or obsolete mall space (e.g., changing store depths, limited availability of potential chain-affiliated retail tenants, decline/consolidation of department store anchor uses, and other causes).
Based on recent performance in stronger/well-established markets, it is likely that the upper price point luxury retail sector, food and beverage clusters, and consumer services will continue to generate business, despite general industry transitions. These changes in market forces do not mean that all shopping centers are obsolete; well established, high-performing luxury- oriented centers continue to do well across the country; the ongoing success of Westfield Brandon and International Plaza/Bay Street are likely to continue, despite wider industry changes.
Such quality retail environments and standards of operations are not vulnerable. While hundreds of existing malls are likely to close, powerhouse shopping centers like International
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 66 WTL+a
Plaza will likely continue to thrive as shopping destinations but will need to continually evolve to attract the different shopping and consumption patterns of Millennials.
The rise of the department store in the first 75 years of the 20th century set the standards for brand development, extending shopping trips to giant ‘flagship’ department stores in major cities. These brands evolved into multi-store chains and established the ‘anchor store’ concept for malls that guaranteed customer traffic and added value to adjoining in-line stores within the malls that they anchored. However, as consumer preferences increasingly sought values, discount chains (like Target, TJ Maxx and Marshall’s) replaced traditional department stores as destinations.
Nationally, this resulted in consolidations of former regional brands into a few remaining stores under the brand “umbrella” of Macy’s (e.g., Burdines’ reputation as a well-known Florida department store became part of Macy’s). J.C. Penney, Macy’s and especially Sears have struggled in the past five years to attract sufficient sales to support their extensive real estate holdings, with Sears now in a serious retrenching position that is closing stores, selling store branded products such as Craftsman Tools and shifting its core business from retailing to capitalization of real estate holdings and a potential shutdown. The decline in sales of these types of traditional downtown and mall department stores demonstrates the magnitude of the transition in the retail industry.
The significance of on-line shopping as a shift in buyer behavior is often cited as the primary reason that U.S. retail is changing. While annual on-line sales have grown significantly each year over the past 15 years, it is not yet the majority of non-grocery sales. On-line shopping is widely available for consumers to ‘comparison shop’ for product pricing, variety of offerings between competing retail operators and to search for special sales promotions, coupons or other incentives. However, some merchandise categories (higher priced apparel, shoes and other size-sensitive consumer goods) still draw customers into stores.
Recent research also indicates that consumers “shop” on-line but frequently make final purchases in stores. For example, during the holiday shopping season of 2017, more purchases were made in stores than on-line for the first time in six years. It is projected that on- line sales will total $500 billion by 2020, or about 20% of all non-food sales in the country. This represents a major increase as a percentage of total retail sales (on-line sales were estimated at less than 1% of total sales in 2005), but it also indicates that 80% of all non-food sales will still WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 67 WTL+a be made in ‘sticks and bricks’ retail businesses. The “death of the retail store” has been exaggerated by the media. Even with continued growth of on-line sales, fully 75% of all non- food sales are still expected to be in stores in 2020.
The ‘Baby-Boomer’ market (born between 1946 and 1964, with a total population of 79 million) is aging away from continuing major consumer spending, despite holding the majority of disposable wealth. By age cohort; consumers in their 60s and 70s do not spend as much on apparel, accessories and other consumer goods. The Millennial generation is the rising force in retail; they will be entering their 30s in the 2020s and will equal the total population of the Baby Boomers (approximately 80 million Millennials).
However, Millennials do not spend in the same way as Baby Boomers, preferring shared ‘experiences’ (e.g., entertainment and dining out with friends) to consuming products. Millennials prefer quality over quantity, do not want to drive extensively (preferring alternative transportation modes), dine out more than twice as often as aging Boomers, and are price savvy about connecting on-line comparison shopping with retail goods and their decisions about what to buy.
The ‘value-oriented’ and ‘upper end’ markets will continue to sell directly to consumers, but middle market retail operators will continue to be squeezed. The U.S. is a mature retail market, and mid-range consumer stores will struggle to hold onto market share as middle-income consumers spend less. Florida has some advantages in that it draws millions of U.S. and international visitors/tourists each year and is a destination for retirees; it also has exhibited sustained growth in jobs and population growth among younger population segments, especially in destination cities like Orlando and Miami. Locally-owned businesses are frequently more challenged in gaining financing or may be undercapitalized, affecting operating costs and ability to invest in their businesses. National/regional chain stores are considered ‘credit tenants’ by commercial lenders, but locally-owned businesses are not typically considered as reliable credit risks.
Finally, lower asking rents for retail space may represent retailers’ inability to generate sufficient sales to warrant higher occupancy costs or may demonstrate property owners’ limited ability to keep commercial buildings in good condition.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 68 WTL+a
University Mall Redevelopment Plan In our view, the purchase and redevelopment of University Mall by RD Management LLC is significant, as it illustrates the general level of investment confidence in commercial uses across the study area. Aside from the study area’s major institutional anchors and employers, such as the adjacent USF campus, University Mall became a symbol of disinvestment and lack of direction for the area.
According to RD Management, the mall will be completely redeveloped and renamed 'Uptown' under its proposed redevelopment plan. The existing mall’s re-design will incorporate existing infrastructure (including the parking garage and anchor store boxes) for redevelopment and will modify circulation zones to become outdoor walking areas. By creating sub-districts and an outdoor environment, the redeveloped mall will be positioned to respond to current shopper preferences for more walkable environments, expanded dining and entertainment options and provide an alternative consumer experience.
As illustrated in Figure 10, the central circulation spine of the former mall will become an open- air walkway and slow-movement vehicular/pedestrian street. The redevelopment plan will also add new uses that over time, will transform the original mall into a mixed-use project that adds taxable value, generates increased sales, and creates synergy between uses. The preliminary development program (at full build-out) for the University Mall/”Uptown Tampa” project is illustrated in Table 23 below.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 69 WTL+a
Table 23: Preliminary Development Program for Uptown Tampa Land Use Program
Retail 618,000 SF
Residential (Apartments & Townhouses) 956 Units
Office/Medical/Institutional 83,000 SF
Hotels (two) 400 Rooms
Parking (Surface & Structured) 6,840 spaces
While market potentials for workplace (office and industrial) are discussed elsewhere in this section, we note that a reduced (and more focused) retail component for the University Mall redevelopment project will benefit from both on-site housing and new office workers. In addition, this type of “urban” mixed-use, walkable environment will address an unserved market for USF faculty, staff and students; will reduce vehicle trips for consumers who live and work at/near the site; and will create more walkable links to the surrounding campus and nearby residential neighborhoods.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 70 WTL+a
Figure 10: Conceptual Redevelopment Plan—University Mall (“Uptown Tampa”)
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 71 WTL+a
Summary of Existing Retail Conditions in the Study Area
. Demographic patterns in the study area are a mix in terms of retail potentials. The resident population has lower average household incomes than other parts of Tampa, but the goals established by Tampa Innovation Alliance, the cluster of medical/hospital facilities, and the significant concentration of USF students, faculty and staff suggest that there are opportunities to upgrade the quality of retail offerings;
. The inventory indicates multiple small neighborhood and convenience markets and has been lacking in full-service grocery stores and brands (although that will be resolved with the opening of a new 29,000 sq. ft., on-campus Publix at the southeast corner of Fletcher Avenue and North Palm Drive);
. According to data from CoStar, the study area contains approximately 3.8 million sq. ft. of total retail space, including the former full space of University Mall (containing five anchors and all pad sites). We note that, while CoStar is considered the industry standard for real estate data, reporting is provided by brokers and frequently does not contain full information (or accurate space in sq. ft.) for owner-occupied or individual retail businesses located in larger properties. Our inventory incorporated many of these store types but did not include the largely vacant University Mall space due to its ongoing redevelopment planning and pending construction;
. An additional variable impacting the analysis of the study area is that the University Mall redevelopment plan has proposed reducing the overall Gross Leasable Area (GLA) of retail by almost half, to 618,000 sq. ft. Because the final retail mix for the redevelopment plan is unknown, WTL+a included the full 3.8 million sq. ft. as the basis for our analysis in calculating annual absorption trends (see Table 25), but acknowledges that the mall’s redevelopment will change both the total amount of supply and the dynamics of leasing and business mix upon completion;
. Much of the remaining inventory would be considered Class B or C retail space. These older spaces may be physically or functionally obsolete, but they also provide affordable space for start-up and undercapitalized small businesses that cannot afford Class A retail space;
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 72 WTL+a
. Using CoStar’s total retail estimate, it is notable that retail vacancy rates in the study area have increased and triple net rental rates have dropped—from an average of $15.90 to $9.42 per sq. ft. We believe that this decline is largely the result of the transition at University Mall;
. The addition of 400 new hotel rooms (200 rooms each in two properties proposed in the Uptown project) will add new business and leisure travel capacity to the marketplace, and will generate retail spending from hotel guests; and
. The proposed redevelopment of University Mall (to be completed in multiple phases) can be expected to have a major influence on shopping patterns within the study area and could also draw an increase in consumer traffic from outside the study area boundaries.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 73 WTL+a
Table 24: Retail Market Profile—Northeast Tampa, 2008—2016
National Recession Change: 2009-2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Ann'l Avg. % CAGR Retail Inventory 12,251,700 12,283,249 12,318,578 12,370,638 12,435,064 12,473,960 12,650,856 12,716,006 12,737,206 485,506
No. of Buildings/Properties 1,139 1,144 1,151 1,160 1,167 1,173 1,179 1,185 1,187 Vacant Stock 945,718 812,059 802,347 751,551 733,567 660,581 677,877 821,785 819,144 (126,574) Vacancy Rate 7.7% 6.6% 6.5% 6.1% 5.9% 5.3% 5.4% 6.5% 6.4% -2.3%
Total Net Absorption (212,758) 165,208 45,041 102,856 82,410 111,882 159,600 (78,758) 23,841 399,322 39,932 Past 5 Years 298,975 59,795
Construction Deliveries 149,097 31,549 35,329 52,060 64,426 38,896 176,896 65,150 21,200 634,603 Overall Rent/SF $ 13.88 $ 14.06 $ 14.01 $ 13.14 $ 12.90 $ 12.48 $ 12.61 $ 12.13 $ 12.71 -1.1% Average Annual % Change 1.3% -0.4% -6.2% -1.8% -3.3% 1.0% -3.8% 4.8% NNN Rent/SF $ 13.97 $ 13.91 $ 13.90 $ 13.89 $ 13.62 $ 13.21 $ 13.24 $ 11.85 $ 12.34 -1.5%
Source: CoStar, Inc.; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 74 WTL+a
Table 25: Retail Market Profile—URA Study Area, 2008—2017
National Recession Change: 2008-2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Ann'l Avg. % CAGR Retail Inventory 3,603,289 3,607,369 3,610,309 3,617,022 3,617,022 3,623,022 3,784,752 3,784,752 3,809,256 3,809,256 205,967 As % of NE Tampa 29.4% 29.4% 29.4% 29.2% 29.1% 30.3% 29.9% 30.0% 29.9%
No. of Buildings/Properties 234 235 236 238 238 239 242 242 245 245 Vacant Stock 157,913 374,155 318,270 287,119 269,566 283,066 283,850 248,749 250,427 233,751 75,838 Vacancy Rate 4.4% 10.4% 8.8% 7.9% 7.5% 7.8% 7.5% 6.6% 6.6% 6.1% 3.8%
Total Net Absorption (22,171) (212,162) 58,825 37,864 17,553 (7,500) 160,946 35,101 22,826 16,676 107,958 10,796 Past 5 Years 228,049 45,610
Construction Deliveries 50,484 4,080 2,940 6,713 - 6,000 161,730 - 24,504 - 256,451 Overall Rent/SF $ 15.58 $ 13.84 $ 13.17 $ 13.40 $ 11.42 $ 11.84 $ 10.65 $ 9.88 $ 9.69 $ 9.46 -5.4% Average Annual % Change -11.2% -4.8% 1.7% -14.8% 3.7% -10.1% -7.2% -1.9% -2.4% NNN Rent/SF $ 15.90 $ 13.75 $ 13.04 $ 12.95 $ 13.62 $ 13.76 $ 13.03 $ 12.64 $ 9.50 $ 9.42 -5.7%
Source: CoStar, Inc.; WTL+a, March 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 75 WTL+a
4 Preliminary Market Potentials
The market study has been tailored to respond to multiple areas of interest as identified by Hillsborough County, including three overarching objectives:
. Consider how the study area fits into the goals and objectives guiding the Tampa Innovation Partnership’s recently-created “!p” strategy as well as the historic University Area Community Development Corporation (UACDC), which is focused on community and resident needs;
. Encourage redevelopment efforts that contribute to the economic prosperity of the County’s residents, especially residents of this study area; and
. Support existing companies, employers and institutions located in the larger Innovation District to create a place that is greater than the sum of its parts.
The following highlights market potentials for each land use.
Workplace/Office Knowledge-based industries like finance, software, business and management consulting services, market and communications, professional/business services such as accountants, legal and medical and other similar businesses house most of their employees in commercial office buildings.
The first step in measuring support for new multi-tenant/speculative office space in the study area examines market potentials for office use in Hillsborough County and allocates demand to the study area. The analysis translates employment forecasts (for 2016—2024) among specific industry sectors in Hillsborough County (as prepared by the Florida Department of Economic Opportunity/DEO), into demand for office space by applying an occupancy factor (of occupied space per employee) and estimates the proportion of employees in each sector who are office workers. We note that DEO employment forecasts are issued only in eight-year periods.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 76 WTL+a
The analysis also considers demand generated by other market factors, such as vacancy adjustments, part-time/self-employed individuals (who may or may not occupy multi-tenant office space), and cumulative replacement; these estimates either increase or reduce future demand for office space. Cumulative replacement, for example, considers tenants that move when a building is removed from the inventory due to physical and/or functional obsolescence.
We note that assumptions pertaining to occupancy factors may be overstated. Since the 2007—2009 recession, office-using businesses have been reducing office occupancies, in some cases by significant amounts. Historically, the commercial real estate industry has used an average occupancy factor of 250 sq. ft. per office employee. However, according to a 2017 study by REIS, Inc. (a national commercial real estate database), the amount of office space per employee has been steadily declining in each successive business cycle after a recession. REIS data indicate that:
. In the national economic expansion of the late 1990s, a new office employee was typically associated with approximately 175 sq. ft. of additional office space
. During the early- and mid-2000s (until the 2007—2009 recession), the typical employee was associated with approximately 125 sq. ft. of additional office space
. Since 2010, however, each added/new employee has been associated with approximately 50 sq. ft. of additional office space. This is particularly notable in space-efficient industries like software and professional/business services, which have been the strongest growing sectors in this business cycle.
Moreover, hoteling and remote work-arrangements, where employees share space rather than having dedicated offices or cubicles, enables companies to accommodate even more workers in a given amount of occupied space.
The office analysis is illustrated in Table 26 and Table 27, and summarized below:
Hillsborough County
. The analysis indicates gross demand for 8.14 million sq. ft. of office space across Hillsborough County between 2016 and 2024, assuming an average occupancy factor of 193 sq. ft. per office employee, generated by growth in office-using jobs. This is inclusive of adjustments related to vacancy, cumulative (building) replacements, tenant relocations, etc.;
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 77 WTL+a
Table 26: Workplace/Office Potentials—Hillsborough County, 2016—2024
New Jobs % Office- SF Occupancy 2024 Demand Industry Sector 2016-2024 Using Factor (In SF) Hillsborough County Agriculture & Mining (254) 10% 150 (3,800) Construction 6,292 15% 175 165,200 Manufacturing 614 20% 200 24,600 Transportation & Warehousing 1,067 20% 175 37,300 Wholesale & Retail Trade 8,450 20% 150 253,500 Information (520) 65% 175 (59,200) Financial Activities 7,156 85% 200 1,216,500
Services Professional, Scientific & Technical Services 12,883 90% 250 2,898,700 Management of Companies 2,277 60% 250 341,600 Administrative & Waste Management 5,681 35% 175 348,000 Educational Services 2,987 20% 200 119,500 Health Care & Social Assistance 14,642 35% 200 1,024,900 Arts, Entertainment & Recreation 1,287 20% 175 45,000 Accommodation & Food Services 7,318 20% 175 256,100 Other Services (Except Government) (1) 2,817 35% 200 197,200 Government 6,974 60% 150 627,700 Self-Employed 4,918 10% 175 86,100 Unclassified Jobs (Data Reconciliation) (287) 0% - - Total/Weighted Average: 84,302 44% 193 7,578,900 + Vacancy Adjustment @ 2.5% (1) 189,500 + Cumulative Replacement Demand 5.0% (2) 378,900
2024 Gross Demand - Hillsborough County: 8,147,300 Existing Vacant Office Space 4,457,942 - Lease-up Required @ 35% (1,560,280) (3) (1,560,280) Remaining Vacant Space: 2,897,662 % Vacant 4.2%
2024 Net Demand: 6,587,000
(1) This allows for a 2.5% "frictional" vacancy rate in new office space delivered to the market (i.e., this accounts for tenant movement to new space). (2) This represents new space required by existing businesses to replace obsolete or otherwise unusable office space. This is assumed to represent 5% of total demand. (3) From a financing perspective, some portion of existing vacant office space in Hillsborough County will need to be leased before financing of new construction is viable. The analysis assumes that 35% of existing vacant office space is leased, thereby reducing the overall vacancy rate to approximately 4.6%.
Source: Florida Dept. of Economic Opportunity; CoStar, Inc.; WTL +a, April 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 78 WTL+a
. From a financing perspective, however, some portion of Hillsborough County’s existing 4.45 million sq. ft. of vacant office space would need to be leased before new office space could be financed. It is also not known how much of the remaining existing vacant inventory suffers from physical and/or functional obsolescence, will be converted to other uses such as residential, or could be demolished.
For purposes of this analysis, WTL+a conservatively assumes that fully 35% of Hillsborough County’s vacant office inventory (approximately 1.56 million sq. ft.) is leased before financing is provided for new office construction. This serves to reduce the County’s office vacancy rate (to roughly 4% from current levels), and lowers demand generated by job growth in office-using sectors to approximately 6.58 million sq. ft. of net new space by 2024;
URA Study Area
. The next step in the analysis is illustrated in Table 27. This estimates opportunities for new office development based on the study area’s current share of employment (see Table 11). With almost 22,000 employees working in the study area, its share is estimated at 3.6% of Hillsborough County’s total jobs;
. Under this “fair share” analysis, the study area would continue to capture 3.6% of future countywide job growth, or approximately 2,990 new employees, by 2024. Assuming similar proportions of office-using jobs and occupancy factors translates into gross demand for roughly 251,700 sq. ft. of office space over the next eight years;
. However, as discussed in Section 3 (see Table 19), there are approximately 77,800 sq. ft. of vacant office space in the study area today. The analysis assumes that up to 25% of existing vacant office space would need to be leased before financing is provided for new office construction. In other words, office locations like the study area are considered riskier for multi-tenant/speculative office buildings (particularly for smaller garden/speculative projects without office anchors). This effectively reduces the study area’s current office vacancy rate from 6.6% to 5%, or stabilized levels;
. This yields net demand for 232,300 sq. ft. of new office space by 2024;
. As noted previously, based on trends over the past 10 years, net absorption (leasing activity) among office buildings in the study area has averaged only 9,950 sq. ft. per year since 2008 and only 17,300 sq. ft. per year over the past 19 years; and WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 79 WTL+a
Table 27: Workplace/Office Potentials—URA Study Area, 2016—2024
2024 Demand (In SF) URA Study Area Total Employment (2017) 21,997 As % of Hillsborough County (3) 3.6%
Fair Share Analysis 2016-2024 Employment Growth (If Fair Share Maintained) 2,993 % Office-using Jobs 44% SF Occupancy Factor 193
2024 Gross Demand - URA Study Area: 251,722 Existing Vacant Office Space 77,758 - Lease-up Required @ 25% (19,440) (4) (19,440) Remaining Vacant Space: 58,319 % Vacant 5.0% 2024 Net Demand - URA Study Area: 232,300 Allocation to Known Office Projects: University Square Mall Redevelopment (5) 283,000
Unallocated Office (Rounded, In SF): (50,700)
(3) Based on 2017 estimates from Dun & Bradstreet. According to the Census Bureau, the study area's share of countywide jobs over the past 10 years (2006-2015) was 2.9%. The analysis assumes that the study area maintains its "fair share" of the County's total jobs for the forecast period. (4) From a financing perspective, some portion of existing vacant office space in the study area will need to be leased before financing of new construction is viable. The analysis assumes that 25% of existing vacant office space is leased, thereby reducing the overall vacancy rate to approximately 5% (i.e., stabilized levels). (5) As of the date of this analysis, there are two proposed office projects, one of which is located in the study area. The first is the redevelopment of University Square Mall, which is expected to comprise two buildings for "office, medical or institutional" uses totaling 283,000 sq. ft. The second project, by Equity LLC, is expected to include 500,000 sq. ft. of new Class A office space in two buildings on its site on Fowler Avenue. While this project is not "officially" in the URA study area, potential impacts on the study area are likely.
Source: Florida Dept. of Economic Opportunity; CoStar, Inc.; WTL +a, April 2018.
. At the historic 10-year pace, it would require almost 22 years to absorb/lease 93% of the 232,300 sq. ft. of demand generated by job growth in office-using sectors (and 12 years at the historic 19-year pace). WTL+a cautions that from a financing perspective, office absorption at this pace is too low to justify investment viability (financing) of new, speculative office buildings in the study area. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 80 WTL+a
These findings suggest that some increment of new office space (generated by net new job growth in office-using sectors) will be supportable in the study area over this forecast period (eight years). However, as noted the area’s historic pace of net office absorption (leasing activity) is too low to justify investment viability (financing) of new speculative office buildings and will require significant pre-leasing efforts on the part of any developer proposing new speculative/multi-tenant office space in the University Redevelopment Area. Proposed Office Projects
As noted, the owners of University Mall, RD Management (which acquired the property in 2014 for $29.5 million), are proposing a redevelopment and re-tenanting strategy that, if financed and built, will deliver up to 283,000 sq. ft. of “office, medical and institutional” uses in two buildings of 182,000 sq. ft. and 101,000 sq. ft. as well as a mix of other uses, including hotel and residential.
As illustrated in Table 26, our analysis of office development potentials assumes that these two buildings are delivered to the market sometime during the forecast period. Since the proposed 283,000 sq. ft. of office space exceeds market potentials generated by “natural” job growth, this will necessitate that RD Management secure an anchor office tenant(s). Phasing of the University Mall redevelopment project is unknown.
We also recognize another office project that is proposed for a location just outside the study area. Equity LLC owns three small office buildings containing 102,054 sq. ft. of gross office space located opposite the USF campus at 4019—4225 E. Fowler Avenue. The developer is proposing a total of 500,000 sq. ft. of Class A office space in two buildings of 250,000 sq. ft. each as well as structured parking. As we understand, the project will be phased to deliver one building in the first phase. Delivery dates and pre-leasing efforts are not known at this time.
Office Market Potentials in the URA Study Area:
Up to 232,000 SF of Net Demand by 2024
With the potential to deliver upwards of 750,000 sq. ft. of new office space within (or adjacent to) the study area over the near-term will require, as noted, significant pre-leasing efforts and will necessitate an increase in the study area’s fair share of employment in office-using sectors.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 81 WTL+a
This level of investment also has the potential to elevate the University Redevelopment Area as a more viable location for investment-grade/Class A office space in the future—not only the Northeast Tampa submarket but in potentially other competitive suburban office submarkets in the Tampa Bay region over the long-term.
Workplace/General Industrial The first step in measuring support for new, general industrial space in the study area examines market potentials for industrial use countywide and allocates demand to the study area. The analysis translates employment forecasts (for 2016—2024) among specific industry sectors in Hillsborough County (as prepared by the Florida Department of Economic Opportunity/DEO) into demand for general industrial space by applying an occupancy factor (of occupied space per employee) and estimates the proportion of employees in each sector who are industrial workers. The following assumptions were utilized in the analysis:
. DEO employment forecasts are issued only in eight-year periods for “Workforce Development Areas” around the state. Hillsborough County is Workforce Development Area #15;
. “General industrial” is defined to include warehousing and distribution, light assembly/manufacturing, freight and logistics and “flex” (combination of industrial and office) uses; and
. The generally accepted industry-standard occupancy factor for industrial space is in the range of 500 to 1,000 sq. ft. Unlike office occupancy factors, which are declining, occupancy factors for industrial employees are increasing due to the significant increase in warehousing and distribution/logistics functions associated with large-scale employers such as Amazon fulfillment centers. For purposes of the analysis, we have utilized a low factor of 475 and a high factor of 705 sq. ft. per employee to account for the blend of small industrial businesses and manufacturers scattered across Hillsborough County in such locations as the study area as well as the new, larger warehousing and distribution buildings that are being constructed in newer industrial parks in the County; and
. We consider demand generated by other market factors, such as vacancy adjustments, part-time/self-employed individuals (who may or may not occupy space), and cumulative replacement; these estimates either increase or reduce future demand for industrial space.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 82 WTL+a
Cumulative replacement, for example, considers tenants that move when a building is removed from the inventory due to physical and/or functional obsolescence.
Hillsborough County
. As illustrated in Table 28, the analysis indicates gross demand ranging from 7.5 million to 11.0 million sq. ft. of general industrial space across Hillsborough County between 2016 and 2024, generated by growth in industrial-using jobs and inclusive of adjustments related to vacancy, cumulative (building) replacements, tenant churn, etc.;
. From a financing perspective, however, some portion of the County’s existing 5.02 million sq. ft. of vacant industrial space would need to be leased before new space could be financed. It is also not known how much of the remaining existing vacant inventory suffers from physical and/or functional obsolescence, will be converted to other uses, or could be demolished;
. For purposes of this analysis, WTL+a conservatively assumes that fully 35% of the County’s 5.02 million sq. ft. of vacant industrial inventory—or 1.75 million sq. ft.—is leased before financing is provided for new construction. This serves to reduce the County’s industrial vacancy rate to roughly 3.6% from current levels, and lowers gross demand generated by job growth in industrial-using sectors to a range of 5.7 million to 9.2 million sq. ft. of net new space by 2024.
Job Growth May Generate 5.7 Million to 9.2 Million SF of Net New
Industrial Space in Hillsborough County by 2024
URA Study Area
. Our analysis of industrial potentials for the study area is illustrated in Table 29. This analysis allocates opportunities for new general industrial space in the study area based on its current share of total jobs relative to Hillsborough County, which is estimated at 3.6% of the County;
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 83 WTL+a
Table 28: Workplace/General Industrial Potentials—Hillsborough County, 2016—2024
New Jobs % Industrial- SF Occupancy Factor 2024 Demand (In SF) Industry Sector 2016-2024 Using Low High Low High Hillsborough County Agriculture & Mining (254) 20% 600 850 (30,480) (43,180) Construction 6,292 15% 1,000 1,250 943,800 1,179,750 Manufacturing Durable Goods 704 90% 850 1,200 538,560 760,320 Non-Durable Goods (90) 90% 850 1,200 (68,850) (97,200) Transp/Communications/Utilities Utilities 54 35% 850 1,200 16,065 22,680 Transportation & Warehousing 1,013 95% 850 1,200 817,998 1,154,820 Wholesale & Retail Trade Wholesale Trade 2,373 80% 850 1,200 1,613,640 2,278,080 Retail Trade 6,077 30% 600 1,000 1,093,860 1,823,100 Information & Finance/Real Estate Information (520) 10% 850 1,000 (44,200) (52,000) Finance & Insurance 5,220 10% 150 300 78,300 156,600 Real Estate Rental & Leasing 1,936 5% 500 750 48,400 72,600 Services Professional, Scientific & Technical Services 12,883 10% 250 400 322,075 515,320 Management of Companies & Enterprises 2,277 5% 175 350 19,924 39,848 Administrative & Waste Management 5,681 10% 600 850 340,860 482,885 Educational Services 2,987 10% 750 1,200 224,025 358,440 Health Care & Social Assistance 14,642 5% 175 300 128,118 219,630 Arts, Entertainment & Recreation 1,287 5% 600 850 38,610 54,698 Accommodation & Food Services 7,318 5% 750 1,000 274,425 365,900 Other Services (Except Government) 2,817 10% 750 1,000 211,275 281,700 Government 6,974 10% 600 850 418,440 592,790 Self-Employed 4,918 5% 250 500 61,475 122,950 Total/Weighted Average: 84,302 13% 476 705 7,046,319 10,289,730
+ Vacancy Adjustment @ 2% (1) 140,900 205,800 + Cumulative Replacement Demand 5% (2) 352,300 514,500
2024 Gross Demand - Hillsborough County (Rounded): 7,539,500 11,010,000 Existing Vacant Industrial Space 5,026,119 - Lease-up Required @ 35% (1,759,100) (3) (1,759,100) (1,759,100) Remaining Vacant Space: 3,267,019 % Vacant 3.6% 2024 Net Demand - Hillsborough County: 5,780,400 9,250,900
(1) This allows for a 2% "frictional" vacancy rate in new industrial space delivered to the market (i.e., this accounts for tenant movement to new space). (2) This represents new space required by existing businesses to replace obsolete or otherwise unusable industrial space. This is assumed to represent 5% of total demand. (3) From a financing perspective, some portion of existing vacant industrial space in Hillsborough County will need to be leased before finan- cing of new construction is viable. The analysis assumes that 35% of existing vacant industrial space is leased, thereby reducing the overall countywide industrial vacancy rate to approximately 3.6% (i.e., stabilized levels).
Source: FL Dept. of Economic Opportunity; CoStar, Inc.; WTL +a, April 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 84 WTL+a
Table 29: Workplace/General Industrial Potentials—URA Study Area, 2016—2024
2024 Demand (In SF) Low High URA Study Area Total Employment (2017) 21,997 21,997 As % of Hillsborough County (4) 3.6% 3.6%
Fair Share Analysis 2016-2024 Employment Growth (If Fair Share Maintained) 2,993 2,993
% Industrial-using Jobs 13% 13% SF Occupancy Factor 476 705 2024 Gross Demand - Study Area: 192,329 284,773
Existing Vacant Industrial Space Vacant Space 47,407 Lease-up Required @ 25% (11,900) (11,900) (11,900) Remaining Vacant Space: (5) 35,500 % Vacant 4.1%
2024 NET DEMAND (In SF): 180,400 272,900
Allocation to Known Industrial Projects - -
Unallocated Industrial (Rounded, In SF): 180,400 272,900
(4) Based on 2017 estimates from Dun & Bradstreet. According to the Census Bureau, the study area's share of countywide jobs over the past 10 years (2006-2015) was 2.9%. The analysis assumes that the study area maintains its "fair share" of the County's total jobs for the forecast period. (5) From a financing perspective, some portion of existing vacant industrial space in the study area will need to be leased before financing of new construction is viable. The analysis assumes that 25% of existing vacant industrial space is leased, thereby reducing the overall vacancy rate to approximately 4% (i.e., stabilized levels).
Source: FL Dept. of Economic Opportunity; CoStar, Inc.; WTL+a, April 2018.
. Under this “fair share” analysis, the study area would continue to capture 3.6% of future job growth, or roughly 2,990 new jobs. Assuming similar proportions of industrial-using jobs (13%) and occupancy factors (476 to 705 sq. ft.) translates into gross demand ranging from a low of 192,300 sq. ft. to a high of 284,800 sq. ft. of general industrial space over the next eight years;
. However, as discussed in Section 3, there are a nominal 47,400 sq. ft. of vacant industrial space in the study area today (all in warehousing/distribution functions). As the degree of functional and/or physical obsolescence is not known, (i.e., these properties may be
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 85 WTL+a
considered higher risk and more difficult to secure financing for renovation), the analysis assumes that 25% of the study area’s existing vacant industrial space is leased before financing is provided for new construction. In other words, absorbing some portion of existing, vacant space would thereby reduce the study area’s industrial vacancy rate to approximately 4%, thereby making new construction financially feasible; and
. This analysis yields net demand to a range of 180,400 to 272,900 sq. ft. of net new general industrial space in the URA study area by 2024.
General Industrial Market Potentials in the URA Study Area:
180,000 to 273,000 SF of Net Demand by 2024
Key issues pertaining to potential locations and sites to accommodate new general industrial uses are included in the implementation strategies at the end of this section of the report.
General Retail Demonstrating significant new demand for retail in the URA is challenged by several factors:
. Spending potentials by University Redevelopment Area households is significantly lower than for households elsewhere in Hillsborough County. As illustrated in Table 6 in section 2, average spending by URA residents is less than $9,100 per year, approximately half of the $17,900 per year spent by County households. Combined with lower average household incomes, these very low spending patterns are indicative of the limited ability of nearby households to purchase discretionary retail goods beyond required spending on housing, food and transportation;
. For retailers and retail developers, the gap between available spending potentials and the capacity of nearby households is too wide to warrant the significant risks in developing additional retail space in the study area. This is compounded by high development costs and commercial rents required to support construction and long-term operating costs;
. USF students, faculty and staff can support approximately 60,000 sq. ft. of retail space (based on spending levels in specific categories as illustrated in Table 25). However,
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 86 WTL+a
students spend a higher proportion of their disposable incomes (averaging about $4,600 per year) on purchases from on-line retailers. Student buyers are also more comfortable making on-line purchases than older-aged cohorts. Students also spend a higher proportion on off- campus food and beverage categories. However, the USF student market in and of itself will not support substantial retail growth (which is magnified by the number of USF students who are commuters/live at home, as they can shop anywhere in greater Tampa);
. The tourist market (primarily focused on the 4.2 million annual visitors to Busch Gardens) will drive some market potential for retail spending, particularly at a redeveloped University Mall. But potential impacts of visitor spending will not be known until the final mix of businesses and restaurants is determined. Food & Beverage is a certain draw, but proximity to hotels and/or other family members may dilute the direct benefit generated by overall visitor spending.
Potential Retail Customer Bases As a means of understanding the depth of market support for retail uses in the study area from two key market segments—visitors to Busch Gardens and USF students—the following examines metrics underpinning retail potentials.
Busch Gardens
While the University Mall redevelopment will parallel initiatives by USF and Tampa !p to bring new specialized economic development and market “drivers” to the URA study area, the proximity to Busch Gardens Tampa should also be considered in its relevance. Although not located within the boundaries of the study area, Busch Gardens is only 1.5 miles south of the University Mall site, and whether its tourism spending has any effect on the study area should be addressed.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 87 WTL+a
Owned by SeaWorld, Busch Gardens Tampa is the 11th most visited theme park in the United States. Visitation is comprised of a mix of overnight guests and day-trip travelers who come to Tampa from the surrounding region, or who may be staying in other destinations like Orlando and come to Tampa as part of a multi- day/multi-attraction vacation. As illustrated in Table 24, Busch Gardens has maintained stable annual attendance over the most recent eight years for which data is available (2009- 2016), averaging 4.2 million annual visitors.
To consider potential retail and hotel spending impacts, WTL+a also incorporated an estimated spending total included in the Innovation Alliance Planning Workshop, prepared by Zyscovich Architects in June 2013 and provided by Hillsborough County. In that report, out-of-park visitor retail spending for 2013 was estimated at $2.98 per visitor (the source of that estimate was not documented). Using an inflation rate of 2.5% per year, WTL+a inflated the estimated spend, yielding a value of $3.29 per visitor in 2017. Over this five-year period, the average spend was $3.13 per visitor; this amount was used to analyze potentially supportable retail space generated solely by Busch Gardens visitors. As illustrated in Table 30, the average estimated visitor spend outside of the attraction was approximately $12.7 million per year.
To translate this spending impact into ‘supportable’ retail space across all retail categories, an average annual sales productivity of $350 per sq. ft. was applied. This amount reflects the level of sales necessary to continue investment in upkeep and building reinvestment by owners and is an industry benchmark both for sustainable rents and sales/rents. If annual sales performance can be sustained at this level, total supportable retail space generated solely by Busch Gardens visitors is estimated at approximately 36,400 sq. ft. However, it should be noted that “supportable” space is distributed across the entire area, and within both existing and new retail configurations, especially food and beverage categories.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 88 WTL+a
Table 30: Annual Attendance & Supportable Retail—Busch Gardens, 2009—2017
Estimated Supportable Total Annual Non-Park Retail Retail @ Year Visitation Spend/Visitor (1) $350/SF
2009 4,100,000 $ 12,218,000 34,909
2010 4,200,000 $ 12,516,000 35,760
2011 4,280,000 $ 12,754,400 36,441
2012 4,350,000 $ 12,963,000 37,037
2013 4,090,000 $ 12,188,200 34,823
2014 4,130,000 $ 12,615,085 36,043
2015 4,250,000 $ 13,306,166 38,018
2016 4,170,000 $ 13,382,089 38,235
Average: 4,196,250 $ 12,742,867 36,400
(1) From Tampa Innovation Alliance Findings Workshop, Zyscovich Architects, June 21, 2013.
Source: Statista; Zyzcovich Architects; RDS LLC; WTL+a, April 2018.
Given the number of fast food and family dining options proximate to (or on roads leading to) Busch Gardens’ visitor entrances, it is not considered a major force in supporting new retail in the study area. However, the proposed redevelopment and proximity of the University Mall/Uptown project could recapture sales from Busch Gardens'
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 89 WTL+a visitors through a combination of newer/more interesting retail and food offerings in a walkable, pedestrian-scale environment. The proximity of two additional hotels, which are proposed as part of the University Mall redevelopment, would also create on-site spending synergy, but potentially at the expense of older product closer to Busch Gardens’ entrances. We do not consider tourism to be a major factor in supporting new retail in the study area, although a small portion of overall tourist spending may supplement a share of spending from households from the surrounding neighborhoods and within the trade area.
USF Students
As illustrated previously in Table 13, USF has over 43,500 students, plus an additional 14,000+ faculty and staff. Due to physical proximity, but restricted time availability and somewhat limited spending power, these groups will be likely to spend more in immediately adjacent portions of the study area when retail and food service offerings are improved near the campus. The greatest likely beneficiary of incremental sales will be the University Mall redevelopment, or ‘Uptown’. Based on our analysis, we anticipate that some portion of faculty and staff, and a smaller portion of USF’s 6,173 full-time graduate students would consider living in one of the 956 new housing units proposed for Uptown. Retail impact is most likely to be in food and beverage, with some spending captured at re-merchandised food service operators at Uptown, but that is at least several years away. Table 31 illustrates typical student spending among U.S. college students:
Student/academic spending is strongly affected by:
. The range, quality and pricing of offerings (i.e., do businesses sell what students faculty and staff want and can afford?)
. Availability at the appropriate time of day (i.e., are stores open when shoppers are available?), and
. Competitive context (i.e., are other locations more interesting than the closest shopping locations?).
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 90 WTL+a
Table 31: Estimated U.S. College Student Spending & Supportable Space
Calculations for Captured Spending Category Low High Average Categories
Clothing $ 450 $ 750 $ 600 $ 600 Entertainment 1,000 1,300 1,150 1,150 Food (Mostly On Campus) 3,500 7,500 5,500 Food & Beverage (Off Campus) 875 1,875 1,375 1,375
Gas/Car Expenses 1,000 5,000 3,000 Campus Activities 400 1,200 800 Gifts 600 1,100 850 850 Electronics/Phone 200 1,200 700 700 Travel 300 1,000 650 Books & School Supplies 600 1,200 900
TOTAL ANNUAL SPENDING: $ 8,925 $ 22,125 $ 15,525 $ 4,675
Average Per Month $ 743.75 $ 1,843.75 $ 1,293.75
Potential Study Area Capture @ 10% Captured Monthly Spending: $ 468
Required Sales Performance/SF 350 SUPPORTABLE RETAIL SPACE PER STUDENT (In SF): 1.34
Source: Love to Know.com; RDS LLC; WTL+a, April 2018.
Given the largely conventional range of chains and lower-priced retail offerings in the study area today, as well as the difficulty in easily accessing retail along linear commercial corridors, the Uptown project is positioned to capture an incremental share of total USF spending. Using data from the spending categories above to test how much retail space students support, we selected potential expenditures for clothing, entertainment, food & beverage (off campus), gifts and electronics/telephone, and conservatively estimated that about 10% of spending would be captured close to the campus (for reasons of proximity/convenience and an assumed better mix of stores after University Mall is redeveloped).
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 91 WTL+a
Total potential estimated spending for these five retail categories would be $4,675 per year per student; however, that spending could occur in other Tampa locations, at home, or on-line. To adjust for spending at University Mall and/or other businesses close to the campus, it was assumed that 10% ($468 per year) of total spending would be local. Using the same annual sales productivity level of $350 per sq. ft. per year, average captured spending would support 1.34 sq. ft. per consumer of retail space around the USF Campus. Total retail space “supported” by USF would be approximately 60,000 sq. ft.
Our analysis suggests that the University Redevelopment Area is significantly over- supplied with retail by almost any measure. While overall retail vacancy levels are low—in the range of 6%—this excludes the significant University Mall vacancies. Moreover, overall retail rents—which declined from $15.58 per sq. ft. in 2008 to $9.46 per sq. ft. in 2017—are too low and will not support new retail construction.
As noted previously, the U.S. is generally over-retailed, with about 23.5 sq. ft. of retail space per capita in 2016. At the end of 2017, Hillsborough County contained 71,782,847 sq. ft. of total retail space. Against a population of 1,382,695, the amount of retail space for each County resident was 51.9 sq. ft. per capita—more than double the U.S. average.
If the 2017 population of the URA study area—36,864 residents—is compared to the CoStar- based total retail inventory—3,809,256 sq. ft.—then the amount of retail space for every resident in the URA study area is 103.33 sq. ft. per capita—fully two times the countywide average and roughly four times the U.S. average.
In conclusion, until the downsized and remerchandised University Mall project is completed, leased and in full operation, WTL+a recommends that no additional retail space should be constructed in the study area.
Hotel/Lodging As discussed previously in Section 3, hotel market performance in and around the University Redevelopment Area steadily improved between 2012 and 2017. Average annual occupancies increased from 60.4% in 2012 to 70.3% in 2017, yielding average occupancy level over the past six years of 65.3% and a compound annual growth rate of 3.1%. Sustained average annual occupancies are a key barometer in the lodging industry in determining whether additional room capacity is viable (i.e., can be financed). The capital WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 92 WTL+a markets typically require sustained annual average occupancies between 65% and 72.5% to justify underwriting financing for new hotel capacity.
The study area’s surrounding lodging market is characterized by a predominance of limited- service hotels. The area’s most upscale hotel is the Embassy Suites, rated by STR Global as Upscale. The hotel reportedly has high occupancies because it is proximate to demand generators such as USF and nearby medical facilities, and frequently houses traveling college sports teams and participants in other University-related events and visitors.
There have been no new hotels built within the URA study area in several years, although a new 84-room Hampton Inn opened in April 2017 and a 106-room Home2Suites, which opened in September 2017. Both are defined by STR as “Upper Midscale” and are located near Busch Gardens, reflecting demand generated by visitors to that attraction. Within the hotel market selected for this analysis, the total room count has increased to 2,304 rooms, representing 10.5% of Hillsborough County’s total room inventory.
Hillsborough County Visitor Growth
According to visitor data collected for a 2016 visitor impact study on behalf of Visit Tampa Bay, a local tourism marketing organization, Hillsborough County had an estimated 22,900,000 visitors in 2016. Reported countywide hotel occupancies averaged 74% in 2017 (slightly higher than the study area’s 70.3%). Total tourist/visitor counts include both hotel/motel guests as well as tourists who stay with friends and family (known in the lodging industry as Visiting Friends & Relatives, or “VFRs”) as well as visitors who stay in other forms of lodging like Airbnb.
As illustrated in Table 32, visitor surveys conducted as part of the 2016 visitor impact study indicate the following:
. 37.8% of all visitors to Hillsborough County stay in hotels and motels . Average party size of 2.13 persons, and . Average length-of-stay of 2.9 days.
Based on a very strong compound annual growth rate of 4.01% per year, the number of visitors over the five-year period between 2012 and 2017 increased by an additional 1.55 million tourists.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 93 WTL+a
To understand market potentials for additional hotel rooms, WTL+a prepared a forecast of annual roomnight demand that assumes continued countywide visitor growth (at a sustained 4.01% per year) and similar visitor metrics (average party size and length of stay) as defined above for a 10-year period from 2018 through 2027.
To estimate demand for new hotel rooms in the University area hotel market during the 10-year forecast period, WTL+a estimated the difference in supportable hotel rooms by comparing actual average annual occupancies in 2017 (70.3%) against minimum/breakeven required annual occupancies (65%) to determine if new rooms can be financed. In other words, as new room supply is added to the University area hotel market, overall occupancies may decline in the short-term. As illustrated in Table 33, market potentials over the next 10 years suggest that:
. At sustained 70.3% occupancies, demand does not generate positive results until year 10, and then only supports a net positive of seven new hotel rooms; . At minimum/breakeven 65% occupancies, market potentials are slightly better—with a net positive of 36 new rooms supportable by 2026 and 130 rooms supportable by 2027; and . The number of ‘supportable’ rooms are snapshots in time; they are not cumulative.
In conclusion, our analysis reveals that study area hotels are sustaining sufficient occupancy levels to support new hotel rooms over time, but the 400 rooms planned as part of the redevelopment of University Mall will more than meet market demand over the forecast period. In fact, even at sustained annual occupancies of 65%, these proposed rooms exceed market potentials, which may result in siphoning market share from among existing properties.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 94 WTL+a
Table 32: Hotel/Lodging Demand, 2012—2017
CAGR Change: 2012-2017 2012 2013 2014 2015 2016 2017 Amount % Hillsborough County All Visitors-Entire County: 19,000,000 19,600,000 20,900,000 21,800,000 22,561,000 23,125,025 4,125,025 4.01% Compound Annual Growth Rate 3.2% 6.6% 4.3% 3.5% 3.5%
Stay in Hotel/Motel: 7,182,000 7,408,800 7,900,200 8,240,400 8,528,058 8,741,259 1,559,259 (1) As % of All Overnight Visitors 37.8% 37.8% 37.8% 37.8% 37.8% 37.8%
(2) / Average Party Size 2.14 2.14 2.14 2.14 2.14 2.14 (2) x Average Length of Stay 2.90 2.90 2.90 2.90 2.90 2.90 Annual Roomnights: 9,750,843 10,058,764 10,725,927 11,187,809 11,578,356 11,867,815 2,116,972 (3) Selected University Area Existing Room Inventory Competitive Properties 2,126 2,126 2,114 2,114 2,304 2,304 178 1.62% New Deliveries ------Existing Hotel Rooms: 2,126 2,126 2,114 2,114 2,304 2,304 % Annual Increase - 0% -1% 0% 9%
Annual Occupancy Competitive Properties 60.4% 58.6% 63.8% 69.6% 68.7% 70.3% 3.07% Occupied Roomnights: 468,945 454,730 493,234 536,969 530,241 567,817 98,872 (4) Share of HC Roomnights 4.81% 4.52% 4.60% 4.80% 4.58% 4.78% -0.1%
Supportable Annual Rooms (@ 100% Occupancy) Annual Roomnights 775,990 776,234 773,632 771,610 771,610 807,642 0.80% / Days Per Year 365 365 365 365 365 365 Supportable Hotel Rooms: 2,126 2,127 2,120 2,114 2,114 2,213 (12)
MARKET POTENTIALS: Existing Hotel Rooms 2,126 2,126 2,114 2,114 2,304 2,304 Supportable Hotel Rooms 2,126 2,127 2,120 2,114 2,114 2,213 (5) Unaccommodated Rooms: - 1 6 - (190) (91)
(1) Based on a 2016 report prepared by Tourism Economics/Oxford Economics on behalf of Visit Tampa Bay. (2) Data on average party size and average length of stay is from the 2016 Tourism Economics/Oxford Economics report. (3) Annual roomnights are determined by dividing total overnight visitors staying in a hotel by party size and multiplying the results by average length of stay. (4) The University area's share of the County's total hotel roomnights was determined based on occupied roomnights for competitive hotel properties. (5) Unaccommodated rooms illustrates the number of supportable rooms in the market. A negative number indicates an over-supply of rooms.
Source: STR Global; Tourism Economics/Oxford Economics; Visit Tampa Bay; RDS LLC; WTL+a, April 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 95 WTL+a
Table 33: Hotel/Lodging Potentials—URA Study Area, 2018—2027
Forecast 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Hillsborough County Overnight Visitors 23,125,025 24,140,214 25,199,969 26,306,248 27,461,092 28,666,634 29,925,099 31,238,811 32,610,195 34,041,782 35,536,216 (1) Annual Growth Rate @ 4.01% Stay in Hotel/Motel 8,741,259 9,091,588 9,455,956 9,834,928 10,229,088 10,639,044 11,065,431 11,508,907 11,970,155 12,449,890 12,948,851 (2) As % of All Overnight Visitors 37.8% 37.8% 37.8% 37.8% 37.8% 37.8% 37.8% 37.8% 37.8% 37.8% 37.8% / Average Party Size 2.13 2.13 2.13 2.13 2.13 2.13 2.13 2.13 2.13 2.13 2.13 x Average Length of Stay 2.90 2.90 2.90 2.90 2.90 2.90 2.90 2.90 2.90 2.90 2.90 Annual Roomnights (3): 11,901,245 12,378,218 12,874,307 13,390,277 13,926,927 14,485,084 15,065,611 15,669,403 16,297,395 16,950,554 17,629,891
University Redevelopment Area Room Inventory Share of Roomnights 4.78% 4.78% 4.78% 4.78% 4.78% 4.78% 4.78% 4.78% 4.78% 4.78% 4.78% Annual Growth Rate @ 0.0% Annual Roomnights: 567,817 592,237 615,973 640,659 666,335 693,041 720,816 749,704 779,751 811,001 843,504 / Days Per Year 365 365 365 365 365 365 365 365 365 365 365
Supportable Rooms: @ 70.3% Occupancy 1,556 1,623 1,688 1,755 1,826 1,899 1,975 2,054 2,136 2,222 2,311 @ 65% Occupancy 1,638 1,709 1,777 1,848 1,922 1,999 2,080 2,163 2,250 2,340 2,433
Market Potentials Existing Rooms 2,304 2,304 2,304 2,304 2,304 2,304 2,304 2,304 2,304 2,304 2,304
Supportable Rooms @ 70.3% Occupancy Supportable Rooms 1,556 1,623 1,688 1,755 1,826 1,899 1,975 2,054 2,136 2,222 2,311 (4) Unaccommodated Rooms (748) (681) (616) (549) (478) (405) (329) (250) (168) (82) 7
Supportable Rooms @ 65% Occupancy Supportable Rooms 1,638 1,709 1,777 1,848 1,922 1,999 2,080 2,163 2,250 2,340 2,433 (4) Unaccommodated Rooms (666) (595) (527) (456) (382) (305) (224) (141) (54) 36 129
Proposed Rooms (5) ------
(1) The number of visitors to Hillsborough County increased at a compound annual rate of 4.01% per year between 2012 and 2016, as reported by Visit Tampa Bay. The analysis assumes that this annual rate of growth continues at the same rate for the 10-year forecast period. (2) The annual rate of increase in overnight visitors staying in a hotel/motel in Hillsborough County is unknown; only data for 2016 was available. (3) Annual roomnights are determined by dividing total overnight visitors staying in a hotel by party size and multiplying the results by average length of stay. (4) Unaccommodated rooms illustrates the number of supportable rooms in the market. Negative demand indicates an over-supply of rooms. (5) The timing of the proposed total of 400 hotel rooms as part of the University Mall redevelopment is unknown.
Source: STR Global; Tourism Economics/Oxford Economics; Visit Tampa Bay; RDS LLC; WTL+a, April 2018. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 96 WTL+a
5 Preliminary Implementation Strategies
Hillsborough County has designated four redevelopment districts or Pilot Project Areas across the County. To encourage investment in these designated zones, a series of special incentives has been created and funded by the County. This section of the report describes the use of policies, incentives and other tools which will likely affect implementation of redevelopment in the study area. While the focus of this analysis is on the University Redevelopment Area, various other factors have also been considered as part of determining how (and where) incentive funds might be allocated among specific projects or sites within the URA.
The URA study area differs from both the 56th Street and North Airport redevelopment areas in that its mix of land uses has greater density, it has considerably more residential and commercial/retail identity and its character is far less industrial than either of the other districts. The URA has an active rail line and strong connections to I 275 and major commercial corridors/state roads. There is a concentration of light industrial uses in the northwest portion of the study area, particularly along N. Nebraska Avenue. As documented in the market analysis in Section 4, there are clear opportunities to increase employment and growth in light industrial uses in this part of the study area. In addition, initiatives spearheaded by the Tampa !p, combined with the concentration of health care/medical research/bio-tech in the study area represent a type of specialized economic “engine” that does not exist anywhere else in the Tampa region.
The Moffitt Cancer Center, expansion of Florida Hospital Tampa, the presence of Haley Veteran’s Hospital, Johns Hopkins All Children’s Hospital and Shriners Hospital for Children on the USF campus all contribute to the unique cluster of highly educated professional staff and patients and families who would benefit by additional amenities to accommodate these destinational facilities. Unlike 56th Street/Orient Road and North Airport, it is education, medicine and medical research which are the differentiating factors driving the economy of the University Redevelopment Area.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 97 WTL+a
Opportunity Zones Program In addition to the existing industrial development incentives provided by Hillsborough County highlighted below, a new class of Federally authorized investment vehicles called Opportunity Funds has been created as part of the 2017 Federal tax reform package, known as the Tax Cuts and Jobs Act. Under the provisions of the new program, each state’s Governor was empowered to designate eligible Opportunity Zones, whether in rural areas or low-income urban communities, which have not been able to attract private investment for economic development, job growth and capital investment in facilities and/or companies.
These Opportunity Zones are defined as low-income Census Tracts with an individual poverty rate of at least 20% and median family income levels no greater than 80% of the area median household income, or other designated areas in which median household income of the tract does not exceed 125% of the area median. As illustrated previously in Figure 3, a significant portion of the URA study area has been designated by the state’s governor as an Opportunity Zone (Census Tracts with a cross-hatched pattern overlay reflect the state’s recommended zones).
In the designated Opportunity Zones, pooled funds from private investors seeking tax benefits can invest money in local projects for up to 10 years. Funds can be invested in three categories of projects:
. Stock in a qualified corporation located within the designated Opportunity Zone . Any Capital or Partnership interest in a qualified domestic partnership . Qualified business properties—tangible properties used in a trade or business of the qualified opportunity fund that substantially improves the property
Eligible private investment funds provide for the reinvestment of unrealized capital gains into Opportunity Funds and are intended to leverage passive holdings of capital into investments in distressed communities/areas.
It is anticipated that the U.S. Department of Treasury will provide guidance on specifics of how Opportunity Funds will be certified and administered after designation of Opportunity Areas. Implementation of the program is anticipated to begin in either the fourth quarter of 2018 or the first quarter of 2019. WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 98 WTL+a
Redevelopment Incentives Program Hillsborough County’s Redevelopment Incentives Program for the four designated Pilot Project Areas can be highly effective in achieving the key goals established by the County in its approval of $16 million for the first year of operations (allocated as $2 million for capital improvements and $14 million for transportation improvements for these four designated areas):
. Attracting private investment into these areas to reduce blight and encourage redevelopment of existing sites;
. Retaining/attracting new jobs in warehousing/distribution and manufacturing businesses; and
. Enhancing the County’s ad valorem tax base in areas that have experienced disinvestment, decline and increased vacancies in industrial, warehousing and flex buildings.
To attract private investment, retain jobs and businesses and enhance the physical conditions within the URA study area (as well as the other Pilot Project Areas), Hillsborough County has created a series of policy and financial incentives to be made available to qualifying projects/developers investing in these areas. To that end, there are seven objectives outlined in the Redevelopment Incentives Program that incorporate a broad range of conditions intended to be addressed by the financial and policy tools:
. To eliminate deterioration and stop the spread of blighted conditions
. To promote conservation, rehabilitation and redevelopment of the project areas in accordance with the Comprehensive Plan, with local Community Plans and all local codes and ordinances
. To achieve higher quality environments through improved architecture, landscape architecture, urban design and land use planning
. To encourage appropriate new construction that reinforces use of existing infrastructure
. To retain existing businesses and jobs
. To streamline public review processes to better leverage private investment, and
. To stabilize and increase the ad valorem tax base within the four designated Pilot Project Areas.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 99 WTL+a
Hillsborough County has also provided for the ability of proposed projects to combine incentives (known as “stacking of incentives”) to foster combination with other County funding and policies but require a public-to-private investment ratio of $1: $5; that is, to qualify for combined incentives, $5 in private investment is required for each $1 of public commitment. If the project is also designated as a ‘Catalyst Project’ under the County’s program, the required public-to- private investment ratio increases to $1: $9 (i.e., $9 in private investment for each $1 of public funding granted).
To encourage the wide distribution of incentive funds, successful grant recipients are excluded from receiving another grant for the specific property for five years after award by the County. To focus application of incentives on building improvements and hard capital investment, the grants cannot be applied to developer profit, attorney’s fees, financing costs, or property acquisition.
Some share of other soft costs may be eligible but will be considered on a case-by-case basis. Typically, developer proposals do not receive consistent, expedited reviews, and unknown elements of an open-ended schedule can complicate a developer’s sense of risk. A clear schedule provides predictability—a key component of building successful public/private partnership initiatives.
The Redevelopment Incentives are organized under four main categories:
. Site Permitting Assistance
. Office & Industrial Building Assistance
. Catalyst Project Incentive Program
. Small Business Façade Program
Specific incentive programs were developed for both the Site Permitting Assistance and Office and Industrial Building Assistance incentive categories, which are described in greater detail below:
Site Permitting Assistance
Expedited Site Development and Construction Plan Review Program—Existing commercial/office/industrial businesses that wish to expand or relocate or businesses that want to build on infill sites in the Redevelopment Pilot Project Areas, which meet EDD criteria and WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 100 WTL+a
reaffirmation by the ED Evaluation Committee, will be given priority over any other projects under review, with an expedited review time not to exceed 10 days. This accelerated time- period does not include land use approvals requiring public hearings (i.e., variances, rezoning, conditional uses, and site plan modifications.
Permit and Impact Fee Grant Program—For new businesses, expansion of existing businesses and changes of use in existing buildings within the Redevelopment Pilot Project Areas, this incentive can reduce up-front development costs by reimbursement up to 50% of impact and construction permit fees, including: Building Permit and Inspection Fees; Water and Sewer Connection Fees; Water and Sewer Impact Fees; and Planning and Zoning Fees directly related to the project approved by BOCC. The maximum reimbursement of these fees will be 50% of costs, with a maximum grant award of $50,000. Funding requests greater than $50,000 will require BOCC approval, and all awards are subject to approval and availability of funds. Eligible projects include office, industrial and manufacturing properties.
Mobility Fee Buydown Incentive Program—Mobility fees are one-time charges on new development to pay for off-site transportation improvements necessitated by new development. Under the Mobility Fee Ordinance adopted in 2016, projects in the Pilot Project Areas after January 1, 2017 will be eligible for Mobility Fee Buydown Incentives. Owners and developers in the identified Redevelopment Incentive Areas can receive up to 75% buydown of fees assessed for office, manufacturing and industrial projects approved by the BOCC. The remaining 25% of the Mobility Fees will be eligible for buydown within 12 months of receiving a Certificate of Occupancy (C of O), and that the project is occupied by a targeted industry end user for a minimum of 12 months and the lease term is a one-year minimum. These terms are provided as illustrative of the anticipated program and may be subject to other conditions and requirements.
Cost savings illustrated above focus on expedited proposed project reviews and fee write downs. The next category of incentives focuses on building assistance for both office and industrial buildings in the four designated Pilot Project Areas
Office & Industrial Building Assistance
Incentives under this category are directed at addressing characteristics of existing office and industrial buildings in the target areas and include financial reimbursements for: (A) Demolition
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 101 WTL+a of Distressed Structures; (B) Infrastructure Assistance; (C) Contaminated Site Assessment and Remediation; (D) Building Exterior Improvements; and (E) Building Interior Improvements. Each of these programs is more fully described below:
. Demolition of Distressed Structures—Eligible expenditures can include the following types of projects: full or partial demolition of building structures conflicting with redevelopment of the site; surface and garage parking; and sidewalks; lighting; landscaping and walls or other structures restricting site redevelopment. To be eligible, properties must meet abatement criteria as required under Section 116–Unsafe Structures and Equipment— of the Hillsborough County Construction Code (Ordinance No. 15-15). The grant reimburses up to 50% of demolition costs up to a maximum of $100,000 per project.
. Infrastructure Assistance Program—Costs for infrastructure repair or replacement for office, manufacturing and industrial projects are eligible up to 50% of infrastructure improvement costs to a maximum of $100,000 per project; as with other incentives, costs must be fully documented and reimbursed after completion. Eligible costs include streetscape improvements, sidewalks, roadways, other pavements, curb & gutter, parking lots, signage, lighting, water, storm-water and sewer and drainage utilities, on-site improvements to landscapes and hardscapes such as irrigation systems and meters, plant materials and mulch, hardscape plazas, decorative walls, fencing and planters. Business owners and developers receiving these incentives must be compliant with all existing city, state and federal building codes and regulations and permitting requirements as a prerequisite to receipt of grant funds.
. Contaminated Site Assessment and Remediation Program—Assessment and/or cleanup of Brownfields associated with abandoned, closed or underutilized industrial or commercial facilities, abandoned factories, and closed commercial buildings or warehouses in urban or suburban settings are eligible for this incentive. Grant funds will be provided to projects unable to secure sufficient funds from sources such as the U.S. Environmental Protection Agency (EPA) or the Florida Department of Environmental Protection to complete assessment and cleanup of the redevelopment site. The reimbursement grant is paid to the owner or developer and provides up to 50% of eligible costs associated with the Remediation Action Plan (RAP) up to a maximum of $50,000 per project. This includes up
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 102 WTL+a
to $15,000 for Phase II Site Assessment. Phase I Assessments are not eligible for these incentives.
Prior County cleanup and/or Brownfield assistance to the project will be considered when determining the grant amount available, so that the County’s incentive amount from all such programs for the project will not be greater than 50% of total RAP and cleanup costs to a maximum of $50,000 per project. Assessment and/or cleanup of contaminated sites associated with abandoned, closed or underutilized industrial or commercial facilities, abandoned factories, closed commercial buildings or warehouses in the Redevelopment Pilot Project Areas are eligible for consideration for these incentives. Owners and developers receiving Contaminated Site Assessment and Remediation Program grant funds must be compliant with all existing city, state, and federal building codes and regulations and permitting requirements as a prerequisite to receipt of funds.
. Building Exterior Improvement Program—Incentive funding will be provided as a reimbursement grant to owners and tenants of office, manufacturing and industrial buildings located in the Redevelopment Pilot Project Areas for fixed capital improvements made as comprehensive exterior renovations. The intent of these incentives is to encourage business and property owners to rehabilitate, renovate or improve their property and to enhance the area’s physical characteristics, visual quality and attractiveness leading to improved occupancy and increased property values. Reimbursement grants are intended for rehabilitation and renovation only and will reimburse up to 50% of total eligible costs associated with comprehensive fixed capital improvements to the exterior of buildings up to a maximum of $100,000 per project. New construction is not eligible for this grant. Eligible costs include significant repair and improvement of exterior building components such as structural repair, concrete restoration, plumbing and electrical work, roof replacement or repair, impact-resistant windows and doors, walls and wall finishes. As with other incentives, owner receiving the grants must be compliant with all existing city, state and federal codes, regulations and requirements.
. Building Interior Improvement Program—These incentives provide reimbursement grants to owners and tenants of office, manufacturing and industrial buildings in the Pilot Project Areas for rehabilitation, renovation or improvements which will lead to improved occupancy and increased property values. Eligible costs for the Building Interior Improvement Program WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 103 WTL+a
incentives include interior walls, plumbing, HVAC, security and fire suppression systems, flooring, drywall, and electrical systems, including lighting. Additional incentives are available if Green Building techniques are used. These grants provide up to 50% of total costs for eligible commercial/office/industrial buildings in an amount not-to-exceed $80,000. New construction is not eligible.
Small Business Façade Program
This program provides financial assistance to qualified owners of commercial properties located in the Redevelopment Pilot Project Areas for eligible building and site improvements that improve the physical, economic, social and aesthetic well-being of the Pilot Project Area. In addition, improvements are encouraged that go beyond the requirements of Hillsborough County’s Land Development Code and Property Maintenance Code to enhance the perception of the area as a place conducive to redevelopment investment. The Small Business Façade grant provides reimbursement of up to 50% of total eligible costs from a minimum of $5,000 up to a maximum of $50,000.
These incentives are directed toward improvement of any exterior building fronts and sides visible to public streets, and include one or more of the following:
. Signs—Removal of old signage and the design, production and installation of new signs.
. Awnings/Canopies—Removal of old awnings and canopies and the design, production and installation of new awnings and canopies.
. Facades—Work performed on exterior storefronts of a building, including masonry cleaning, painting, window or door replacement, and other repairs or rebuilding of historic/existing storefronts. Exterior painting costs should not exceed 20% of the scope of work and the total grant amount.
. Walls, Fencing and Landscape—These incentives may include work to replace or add appropriate fencing or landscaping to hide incompatible or negative site elements, such as storage yards, dumpsters, outdoor fabrication or work areas. This type of work should not exceed 20% of the scope of work or of the total grant proceeds.
. Architectural Fees—Reimbursement of architectural fees may not exceed 20% of the total grant amount up to a maximum of $10,000.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 104 WTL+a
The following items are specifically ineligible for the incentives program:
. Parking lot paving
. Interior work (even if visible through street-front windows
. Other improvements required for redevelopment or occupancy of the property with the sole intention of complying with the County’s Building Codes
. Roof repair or replacement
. Installation of seasonal planting or other seasonal landscaping
. Permit fees
. Inventory, fixtures or equipment
. Non-fixed improvements
. Improvements made prior to grant approval
. Refinancing existing debt, and
. Sweat equity payments (i.e. reimbursement for applicant’s own labor and performance of renovation work or new construction)
Applicants are responsible for obtaining all required building permits. Business owners receiving Façade Grant funds must be compliant with all existing city, state and federal building codes, regulations and permitting requirements as a prerequisite for receipt of funds.
Summary
The significant amount appropriated for these four incentive categories are both substantial (at $16 million in FY2017; currently available funding is unknown) as well as limited, given the scope and scale of improvements, which might qualify across all the Redevelopment Areas. Unlike the other Redevelopment Area market studies prepared by WTL+a, however, the URA study area has numerous smaller commercial structures along N Nebraska, E. Fowler and near (and surrounding) the University Mall redevelopment site which could benefit from use of the storefront and sign improvement incentives.
The availability of public grants is likely to generate substantial interest by the private sector in selected older structures and buildable sites in the URA study area. As an innovative pilot
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 105 WTL+a
program, the incentives offer a powerful tool to stimulate reinvestment in areas that have experienced disinvestment and in selected locations of decline and vacancy. The level of interest by developers/investors may determine that the structure of the incentives is fully workable and appropriate for the market and could attract enough investors/applicants to fully use available funding. In discussing the incentives program with stakeholders in our other market studies, a financial institution suggested that, because investors will potentially carry all costs for one to two years (or more, depending on the category of the incentives) before they are eligible to receive grant funding, this might possibly affect a small number of applicants’ ability to receive financing.
As with any ‘pilot’ program, the County’s Economic Development Department will continue to look for ways to enhance the availability of matching private financing with qualified applicants, including how private lenders consider grant funding as a form of project equity. It is anticipated that, should implementation issues be identified in the program by working with initial grantees and applicants, the EDD is committed to further improve the effectiveness of the incentives project through any needed refinements.
Catalyst Project Incentive Programs
The overall objective of the Catalyst Project Incentive Program is to promote office and industrial development in areas where perceived or real economic conditions would preclude investment in such uses. “Catalyst Projects” are defined by the impact of their scale and scope; their potential fiscal impact (jobs and revenue generation potentials); opportunity to improve property values in adjoining sites and areas and promote office and industrial development. Incentive funds are available to property owners and developers for commercial and mixed-use projects that make a significant expansion or upgrade of real property and act as a catalyst for further positive change for the area, resulting in an increase in private investment in other areas of the Pilot Project Area. Funds provided through this program can be used for acquisition of land or buildings, renovations, on-site infrastructure related costs and new construction of significant catalyst buildings. Mixed-use, transit-oriented and significant retail developments may be considered.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 106 WTL+a
Figure 11: Redevelopment Opportunity Properties—Land Share of Total Just Value > 50%
Parcels illustrated include those where the share of land value to total just value is 50% or greater
Project proposals may include: acquisition of land or buildings, renovations, on-site infrastructure-related costs and new construction of significant catalyst buildings. Funds provided through these incentives may be used for significant commercial and mixed-use projects that incorporate rehabilitation and renovation projects, site work, and substantial exterior improvements, or new construction projects on unimproved land, including site work and landscaping providing substantial visible exterior improvements. Business owners and developers receiving Catalyst Project Incentives must be compliant with all codes, regulations and permitting requirements as a prerequisite to receipt of funds. The Catalyst Project Incentive
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 107 WTL+a
provides for a reimbursement of total eligible costs from a minimum of $50,000 up to a maximum of $350,000 per project.
Hillsborough County’s list of Competitive Sites all fall outside the boundaries of the URA, however, the County’s Redevelopment Area Distressed Properties Map (illustrated in Figure 11) includes six categories of identified distressed land uses:
. Office . Commercial . Mixed-use . Industrial . Government Property . Public Services
Potential Sites with Greatest Redevelopment Opportunity WTL+a reviewed a selected group of properties included and, in several cases, in addition to the properties identified where land values exceed just values of 50% or greater. Conventional redevelopment opportunity sites are based on established principles of real estate value potentials—including:
. Lower land costs . Visibility and access to high traffic roadways and arterial routes . Access to active rail lines (particularly for selected industrial uses) . Availability of infrastructure/power/other utilities . Assembled site size . Proximity to adjacent sites for larger site assemblies, etc.
In considering these criteria, WTL+a reviewed County Property Appraiser assessment data and evaluated the degree to whether certain sites meet the other criteria listed above. Based on our review of the criteria and County maps, five sites were determined to meet most or all criteria for potential redevelopment. For the University Redevelopment Area, WTL+a recommends that underlying property values should be the first determinant in catalyzing new (private) investments in the URA.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 108 WTL+a
A comparative analysis of property values per square foot was used to determine which sites might be considered the most ‘undervalued’, with other criteria balanced against site size, assembled property and status of current use. As illustrated in Table 34, we identified 11 candidate sites with an overall just/market value of $3.93 per sq. ft. of land. However, in our view, there are five sites that best meet the requirements for potential redevelopment. These five sites have considerably lower market values—averaging $1.44 per sq. ft.
It should be noted that any applicable environmental mitigation conditions and/or costs for necessary remediation of the recommended sites are unknown. The recommendations also do not incorporate any priorities or conditions determined by current owners. For purposes of comparison, some higher-value properties (e.g., the CarMax facility on N. Nebraska Avenue) were included, not because they are candidates for near-term redevelopment, but as an indication of relative value as affected by recently constructed buildings or other site improvements.
The selected sites are highlighted in Figure 12. Just values for 2018 are listed (and ranked in Table 34 by increasing just/market value per sq. ft.), which combines both land and buildings/improvements.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 109 WTL+a
Figure 12: Potential Study Area Sites with Greatest Redevelopment Opportunity
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 110 WTL+a
Table 34: Potential Study Area Sites with Greatest Redevelopment Opportunity
Just/Market Land Area Value Map No. Owner Address Use Value Acres SF Per SF
(1) 1 Skemp Trustees 1006 Bearss Avenue Golf Driving Range $ 580,033 27.90 1,215,324 $ 0.48 2 Stony Pointe Development Co 1201 E 148th Avenue Angelos Recycled Materials 1,459,136 28.35 1,234,926 1.18 3 Robbins Real Estate 1003 E 131st Avenue Lumberyard/Wood Treatment 2,123,042 23.86 1,039,342 2.04 4 Angelos Aggregate Materials LLC 14806 N 12th Avenue Materials Storage 1,241,965 12.91 562,360 2.21 5 Verizon Florida Inc. 1410 E 131st Avenue Vehicle Storage Yard 773,395 5.38 234,353 3.30 Subtotal - Selected Potential Catalyst Sites: $ 6,177,571 98.40 4,286,304 $ 1.44
6 Grand Prix Tampa 14340 N Nebraska Avenue Outdoor Visitor Attraction $ 2,699,615 14.33 624,215 $ 4.32 7 China Family Restaurant Inc. 13212 N Nebraska Avenue Mobile Home Park 1,135,347 5.52 240,451 4.72 8 Village of Tampa LLC 1201 E Skipper Road Mobile Home Park 15,285,945 62.62 2,727,727 5.60 9 Hidden Oaks Mobile Home Park Inc. 707 E 138th Avenue Mobile Home Park 1,598,700 6.31 274,864 5.82 10 CC-Investors 1997-1 14920 N Nebraska Avenue CarMax Auto Dealership 9,979,197 36.33 1,582,535 6.31 11 Robbins Real Estate 13001 N Nebraska Avenue Mixed-use Warehouse 2,671,513 7.49 326,264 8.19 Subtotal - Other Potential Catalyst Sites: $ 33,370,317 132.60 5,776,056 $ 5.78
TOTAL - POTENTIAL CATALYST SITES: $ 39,547,888 231.0 10,062,360 $ 3.93
(1) Just/Market Values reflect 2018 property tax data from Hillsborough County Property Appraiser.
Source: Hillsborough County Property Appraiser; RDS LLC; WTL+a, May 2018.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 111 WTL+a
Catalyst Site #1
Property Type: Executive/Practice Golf Course (Undeveloped)
Address: 1006 E. Bearss Avenue
Ownership: Trustees of Skemp Family Estate
Size: 27.92 acres
Just/Market Value: $580,033 (combining land and buildings/improvements)
Value/SF: $0.48 per sq. ft.
Catalyst Site #1 has the lowest land value of all suggested potential catalyst sites. This site is designated as Mixed-Use and could accommodate housing and commercial uses. It is adjacent (and visually connected to) a residential neighborhood and located near Sinclair Hills Road and Burrell Lake, which suggests that the lake/water feature could create additional amenity value for residential uses.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 112 WTL+a
Catalyst Site #2
Property Type: Minerals Processing
Address: 1201 E. 148th Avenue
Ownership: Stony Point Development Corp.
Size: 28.35 acres
Just/Market Value: $1,459,136
Value/SF: $1.18
Catalyst Site #4 is operated as an aggregate materials holding and distribution site by Angelo’s Aggregate Materials, a large waste and refuse management and recycling company with offices in multiple cities in Florida and across the U.S. The company specializes in tire recycling; rentals of roll off dumpsters for hauling of construction debris; asbestos disposal; construction and demolition recycling/disposal; wood waste recycling; and provision of borrow pit soils for construction. It is unknown if redevelopment would require any environmental improvements. The property is designated as Industrial and could possibly be assembled into a larger parcel with adjoining site(s) (see Catalyst Site #4).
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 113 WTL+a
Catalyst Site #3
Property Type: Lumber Yard/Mill
Address: 1003 E. 131st Avenue
Ownership: Robbins Real Estate, Inc.
Size: 23.86 acres
Just/Market Value: $2,123,042
Value/SF: $2.04
Catalyst Site #3 is the Robbins Lumberyard & Wood Treatment Company, located adjacent to the rail line and just east of N. Nebraska Avenue. The property is fully-assembled, and ownership is presumably an affiliate of the 75-year old Robbins Lumber & Wood Treatment Company. Although the larger portion of the property is separated from N. Nebraska Avenue by the rail line, Robbins Real Estate is also listed as the owner of the adjacent parcel fronting on Nebraska. In 2016, the owner sold five of its six wood treatment facilities to Universal Wood Products of Grand Rapids, MI. It is unclear if this property was sold as part of the company’s assets. It is unknown whether current use and products on the site would require any environmental remediation if redeveloped. The site is designated as Industrial.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 114 WTL+a
Catalyst Site #4
Property Type: Minerals Processing (Undeveloped)
Address: 14806 N. 12th Avenue
Ownership: Angelos Aggregate Materials LLC
Size: 12.91 acres
Just/Market Value: $1,241,909
Value/SF: $2.20
Catalyst Site #4 is an undeveloped property currently used for holding of recycled materials. The property has approximately 600 feet of railroad track frontage; a stormwater retention pond is located on an adjacent, separately-owned parcel. Road access is provided from Bearss Avenue. The property is designated as Industrial and could possibly be assembled into a larger parcel with adjoining site(s) (see Catalyst Site #2).
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 115 WTL+a
Catalyst Site #5
Property Type: Utility
Address: 1410 E. 131st Avenue (at N. 15th Avenue)
Ownership: Verizon Florida, Inc.
Size: 5.38 acres
Just/Market Value: $773,395
Value/SF: $3.30
Catalyst Site #5 appears to be used as a utility vehicle storage yard by Verizon. The property is designated as Government although Verizon Florida, Inc. is listed as the owner. The site is surrounded by residential uses and open space/stormwater retention pond, which enhance its marketability for mixed-density residential uses. It is approximately 300 feet northeast of the Robbins Lumberyard site.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 116 WTL+a
Recommendations & Phasing Considerations Recommendation #1
Complete a windshield/visual inventory of smaller and older retail buildings on the URA study area’s commercial corridors; identify those buildings and storefronts that would qualify for the Small Business Façade Program.
Recommendation #2
Assess long-term opportunities to add or enhance the sidewalk network throughout study area neighborhoods and along pedestrian routes that would encourage residents to walk to commercial districts and destination shopping. The area would also benefit from longer term capital investments in pedestrian safety improvements at crosswalks, traffic intersections and along streets where sidewalks are too close to vehicle travel lanes.
Recommendation #3
Support the proposed redevelopment of University Mall through flexible review scheduling, zoning/entitlements and land use reviews, etc. The Uptown project as proposed has the potential to significantly boost market perceptions about this part of Northeast Tampa and could reinforce linkages/connections to adjacent and nearby demand generators such as USF and the study area’s major employers.
Recommendation #4
Sites with the greatest opportunity for redevelopment identified above include allowed mixed- use, industrial and governmental uses for potential redevelopment. As our analysis indicates, near-term demand for general industrial uses is positive—in the range of 180,000 to 250,000 sq. ft. of new space. Therefore, in our view it would be most effective to prioritize one of the sites (or encourage assemblage of available adjacent sites) to provide for one designated redevelopment location that can accommodate new light industrial prospects as part of a “planned business park”. For example, based on available market demand, Catalyst Site #2 (containing 28.35 acres) could accommodate all available near-term demand on this site under an assumed floor area ratio (FAR) of 0.20. Over time, it is probable that other catalyst sites can become attractive investment locations for other businesses.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 117 WTL+a
Recommendation #5
The co-location of so many health, medical research and treatment facilities near within the URA study area is a clear distinguishing factor in repositioning the district. Recruiting, adding and supporting growth in this sector should be paired with specialized educational programs to help provide both job skills and opportunities for nearby residents. This includes supporting the continued buildout of the USF Research Park, which has approximately 70 acres of its 112-acre campus remaining for development of R&D, bio- and medical technology uses.
Market potentials for speculative/multi-tenant office space are sufficiently strong over the near- term. We recommend that the County support the zoning/entitlements and land use reviews associated with the proposed redevelopment of the University Mall site, as the project is proposing 283,000 sq. ft. of new “office/medical/institutional” uses. It is the most viable location to accommodate better-quality new office space. The Uptown project’s walkable, mixed-use environment, with high-quality public realm improvements, will enhance the marketability for new speculative/multi-tenant office space in the study area.
Recommendation #6
Market potentials for additional hotel rooms are not currently supportable, but the opportunity becomes positive within the next 10 years based on minimum/threshold occupancy levels of 65% critical to financing new hotel development. However, the two, 200-room hotels planned as part of the University Mall redevelopment will almost certainly require feasibility studies to determine if changes in long-term trends and market share can be enhanced to alter the current steady, but slow recovery from an apparent oversupply of existing rooms.
Recommendation #7
Consider developing/adopting a design improvements/guidelines manual for facades and signs. The ‘document’ could be in print or published on a website to provide low-cost design assistance to property owners. Experience in other locations has repeatedly demonstrated that an organized, low cost/free design coordinator can leverage greater investment from property owners, can direct façade and sign designs toward a more cost-effective solution, and can create a “place-appropriate” character.
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 118 WTL+a
Recommendation #8
Although existing environmental conditions on the recommended Catalyst Sites are unknown, some incentive funding should be allocated toward covering potential remediation costs in the future. Because environmental issues and reviews can take many years to be completed, even for small sites, a funded remediation incentives program may be needed to accelerate investment and implementation of new light industrial and/or mixed-use projects.
Preliminary Market Potentials Building upon the demographic profile in Section 2 and real estate market conditions in Section 3, our analysis of preliminary market potentials suggests the following:
Multi-tenant/Speculative Office Up to 232,000 SF (8 Years)
General Industrial/Planned Business 180,000 to 275,000 SF (8 Years)
Hotel/Lodging In Equilibrium/Limited Near-term Demand
Supporting Retail/Food Service Limited (Contingent on Redevelopment of University Mall)
WTL +a Real Estate & Economic Advisors Washington, DC—Provincetown, MA 202.636.4002 301.502.4171 774.538.6070 119