Tampa’s Luxury High-Rise Race to Become Miami

Real estate developers are scurrying into the Tampa, Florida, rat race. 

As the area has caught the eye of affluent young homebuyers, developers are hoping to capitalize on the newly roaring luxury residential market. Construction cranes are towering over Tampa, dominating the skyline so much so that local papers have launched crane trackers.

Building a luxury high-rise takes land, resources and time. Developers in Tampa are snapping up lots at higher costs and now trying to beat the clock. Turning a profit requires completing construction and bringing units to the market as soon as possible to win over the competition. 

“This is like Miami 30 years ago,” said Dominic Pickering, BTI Partners Executive Director of Florida’s West Coast.

In 2018, BTI bought a series of sites to construct two luxury waterfront condominium developments, dubbed Marina Pointe. In Tower One, 98% of units have sold with residents moving in, while Tower Two has just converted its reservations for units into sales agreements.

However, BTI has more rivals now than ever before. That's only expected to accelerate.

One Tampa, which won't finish construction until 2026, has already reached $200 million in sales. It helps that prices for one of its 225 units start at $1 million. The luxury hotel and residential tower rising in Tampa's downtown, called Pendry, recently boasted the same achievement, with prices starting at $1.3 million.

“Buyers are coming from across the country," Tina Necrason, executive vice president of Residential Montage International — Pendry's developer — said in a statement.

Nearby, Valor Capital recently submitted plans to construct a pair of 35-story towers that would be nearly twice the size of the current tallest building in Clearwater and among the tallest in Tampa Bay.

It's not just residential. The Tampa Bay Ray's stadium Tropicana Field is in the early stages of redevelopment. The Florida Aquarium has embarked on a three-year, $40 million expansion. The riverfront is also undergoing improvements with expansions of arts institutions and a $38 million renovation of the Tampa Convention Center surrounding several high-rise projects.

“We were the only game in town when we were selling Tower One. What we've now got is almost a critical mass,” Pickering said. “When people are thinking of where to go in Florida to buy luxury real estate, Tampa is now in the conversation. Ten years ago, it wasn't in the conversation. It was Miami and Orlando.”

Last year, the Tampa Bay metro area had one of the state’s biggest year-over-year increases in the number of residential building permits filed, with 21% more permits — nearly 30,000 — issued compared to 2021.

“Tampa has been completely taken over by Miami and New York developers,” said Anne-Sophie Petit-Frere, a real estate agent with Douglas Elliman. “In comparison to their city, the lot was super cheap, but because of all of that activity, they've driven the prices up.”

In May 2022, Silverstein Properties joined the game, acquiring a vacant lot in Tampa's downtown. The developer is known for redeveloping New York City's World Trade Center.

But some developers are already showing signs of anxiety as they rush to build up. In August, the Tampa Bay Times reported that Miami-based Related Group requested $4.25 million from the West Tampa Community Redevelopment Area for their 18-acre redevelopment west of the city’s downtown. The $300 million project will bring mixed-income housing, retail and community amenities in one hub.

Like all other developers in the process of building, Related is facing rising prices of materials and resources, and likely attempting to offset some of those costs, the paper reported. Related did not respond to The Messenger's request for comment.

Real Estate appraiser Jonathan Miller calls the race to the skyline a "resetting" of Florida's markets.

“You can see it just through some high-end trophy sales, that people are buying property not just in the old go-tos, like Palm Beach and Miami,” Miller said. “Everything is fair game and the cities are competing with each other.” 

Florida experienced an influx of high net worth residents during the pandemic from New York and elsewhere. By 2021, South Florida had a net increase of $16 billion in household income thanks to the flow of pandemic spurred migration, according to an analysis by the organization Miami Realtors. In Palm Beach the average home sale price hit $20 million last quarter.

Real estate experts say that many residents new to the state originally moved to Miami, but, as time has passed, realized that the cigar-smoking, Cubano-eating and club-going lifestyle is not for them. They’re now exploring other areas of the state. 

Petit-Frere said that her clientele has changed significantly. Young professionals, especially those working in tech, are investing in the luxury homes historically bought by older executives and retirees. Tampa is among the largest tech markets experiencing rapid millennial growth, with a 16% increase in 25 to 39 year olds from 2015, according to a 2022 report by commercial brokerage CBRE.

“The young professionals that are coming from California, New York and Chicago, their income in comparison to what they would get paid in Tampa is drastically different,” Petit-Frere said. “They're able to afford a lot more house than they would in their own city.”

The only issue that the demand is here and now. In October, 250 contracts were signed for condos in Hillsborough County — a 17% fall from the prior year — according to a report by Miller for Douglas Elliman. Miller attributes that decline to a lack of supply turning potential buyers away.

"Everyone is going to walk away winning, but it's about how much they're winning," Petit-Frere said of the developer race.

But Pickering, whose BTI Partners is already fulfilling that demand, said he’s not afraid of a little competition. 

“When we were the very few marketing Tampa, that was a bit of an uphill struggle,” Pickering said. “I'm certainly not a person who is anti other people coming in. Essentially, what it's doing is it's making the noise louder.”