ST. PETERSBURG — Construction cranes will remain a part of the downtown landscape well into next year as one of the biggest residential building booms in this city’s history keeps going strong.
Developers say their bet on St. Petersburg as an ideal spot for urban dwellers is paying off.
Four apartment buildings have begun opening in the past 12 months, representing more than 800 units, and managers report a strong wave of leasing.
But when the dust settles, there will be another 1,200 homes left to fill, including luxury condominiums, chic apartments and townhomes, all slated to go up within a few blocks of the downtown waterfront.
Their presence is expected to keep money flowing for businesses at the recently opened Sundial shopping center, and as more people hit the streets, city officials anticipate more entertainment, restaurants and other retail will cater to the growing populace.
When the incessant pile driving finally ceases — which may not happen for several more years — the downtown streetscape will include at least six new rental apartment buildings, five new condominium towers and a townhome development, ranging from four stories to more than 40 stories tall.
Cleveland-based builder NRP just now is putting finishing touches on many of its swanky apartments at Beacon 430, and the company already is planning for an even more luxuriant residential project on the north side of its existing building on Third Avenue South.
While details of that project aren’t complete, company Vice President Kurt Kehoe says even with more than 2,000 new residences going on the market downtown in the next two years, there still is room to grow.
“We strongly feel there’s depth of demand for what we’re planning. That’s where we are. The interest in downtown St. Petersburg is phenomenal,” Kehoe said.
In many parts of the country, the interest from investors in multifamily development — particularly in pedestrian-friendly city centers — has been phenomenal for several years.
Nationally, more than 220,000 apartment units have been built this year and another 250,000 are expected in 2015, according to the real estate company CoStar.
The trend of both young professionals and retirees moving away from single-family home ownership toward renting has spurred dozens of multifamily projects across the Tampa Bay area, especially in downtown Tampa and St. Petersburg.
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After a boom in condo construction along St. Petersburg’s trendy Beach Drive ended with the economic crash, it took developers several years to return downtown, at first with proposals for modest low to mid-rise apartments.
The first crop of apartments followed the mold of the five-story Fusion 1560 on downtown St. Petersburg’s western edge, just north of Tropicana Field.
Fusion opened in 2011 and took a couple of years to fill, especially its bottom-floor retail space. But now the apartment complex and the surrounding business district are hopping with restaurants, microbreweries, furniture stores and cafes with a built-in customer base at their front doors.
The first set of downtown apartments includes two tailored primarily to seniors and lower-income residents, and another two aiming for an upscale clientele.
Developers have found success at both ends of the financial spectrum.
Urban Landings/Harbour’s Edge, a 125-unit mix of senior homes, affordable units and market-rate apartments on Fourth Avenue South, was entirely leased within a couple months of opening last December, managers there said.
The building’s bottom floor now has a fitness center and salon.
Modera Prime 235, at 235 Third Ave. N., opened in April and has more than 90 percent of its 309 upscale units leased, where studios start near $1,200 monthly, managers say.
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And while people have been moving into Modera Prime, businesses offering designer clothes, salon services, jewelry and gourmet foods have started moving into the redeveloped Sundial shopping center about a block away.
The influx of new residents downtown is key to making Sundial an economic success where its predecessor, BayWalk, failed, Edwards Group President Rick Baker said at a fall news conference for the shopping plaza’s reopening.
Between Beach Drive’s condos and all the new residences coming into town, merchants expect a boost to their businesses and a wider variety of shops opening downtown.
“When there’s that many condos and that many people living downtown, it allows the business environment to be a little bit more diverse,” said Matt Shapiro, who runs the Shapiro gallery on Beach Drive and is president of the Downtown Business Association.
“Pretty much everything you need you can now go to downtown St. Pete and find it, whereas before you’d either have to go to Tampa or the outlet malls or whatever the case may be to find what you’re looking for,” he said.
The city’s economic development office anticipates more retailers catering to everyday needs rather than just offering places to eat, drink and be entertained.
“We’ve got a packed downtown now, which is crowded — you can almost say it’s overrun — with people. There’s going to be more demand for grocery stores and drugstores and dry cleaners, just those daily goods and services kinds of uses,” said Dave Goodwin, the city’s economic development director. The upcoming round of construction will be even larger than what’s built now, and in most cases, the projects will target an even more affluent clientele.
The largest by far is a 41-story condo project called ONE, which will include 253 luxury condos next to a 13-story, 174-room hotel on a mostly-empty city lot along Central Avenue.
Its location and height require approval by the Federal Aviation Administration due to its proximity to waterfront Albert Whitted Airport.
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Beacon 430 already is designed to capture renters who earn higher-than-average incomes, with one-bedroom apartments at around $1,200 and up, but Kehoe says the project on the parking lot his company is under contract to buy from the Tampa Bay Times across the street likely will be even more upscale.
“We don’t know yet whether it’s going to be a luxury rental or possibly condo or some other variation,” Kehoe said.
While occupancy in the city’s rental stock and condo presales are both high now, it remains to be seen just how many people have the desire and money to move in during the next few years.
Analysts at CoStar expect new multifamily construction to peak in 2015 across the country and some markets will begin to see vacancy rates tick upward and rental prices move downward.
Nonetheless, with fewer people buying homes, renter numbers are expected to keep heading upward, a report released this month states.
“This is kind of a national trend with folks looking for a more walkable, urban, higher-amenity lifestyle. St. Pete happens to have that environment in a big way,” Goodwin said.
“Absorption is strong. How many units the market will absorb, I don’t know.”