- September 6, 2024
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The owner of a Publix-anchored shopping center off Interstate 75 between Palmetto and Parrish recently opened a rental community nearby that incorporates the latest trends in the market.
Luxury apartment community Gateway Commons opened June 1 with one building, and a second followed in July. When it is built out by the end of the year, the community will consist of five buildings and a total of 280 apartments. It will also have 60 electric vehicle charging stations. That is one of many features built into the community to be sensitive to the environment as well as attract and retain renters.
“What we’ve developed with Gateway Commons is a very well-thought-out community that multigenerational residents will appreciate,” says Stephanie Baker, president and CEO of Coppell, Texas-based Accolade Property Management, which oversees leasing.
The community features amenities like a car wash, dog park, fitness room, pool, outdoor kitchen and outdoor fireplaces. Reflecting the changing nature of the workplace, the clubhouse offers wifi and bifurcated areas for in-person meetings. Solar panels on the roof power the common areas, and the developer elected to have the project built in concrete with the highest resistant hurricane impact windows.
“We’ve been doing really well,” says Baker. “We’ve had a lot of people coming in from the area because of the newness of what we’ve built and because the area is up and coming. Because it is a newer market, I think there’s a lot of pent-up demand there, especially once we educate everybody on the location.”
The apartment complex is off I-75 at the Moccasin Wallow Road exit, which is about 20 to 25 minutes to both St. Petersburg and Sarasota.
Some renters are older people who do not want to deal with maintaining a house. “We’ve gotten a lot of older residents from the area come in to see, and the word of mouth from that has been fantastic,” Baker says.
At the same time, Gateway Commons is attracting another segment of the market.
“Because the interest rates are so high right now, people in their 20s, 30s and 40s are choosing not to buy homes,” Baker says. “They want to rent.”
Apartments at Gateway Commons reflect a slight drop in rent prices happening as the market balances out, according to Baker.
The community offers 1, 2 and 3 bedrooms, with rates ranging from $1,673 for a 1-bedroom to $2,552 for a 3-bedroom unit.
During the pandemic, Florida saw 15 to 25% increases in rent around 2021 and 2022, when the state dealt with the ”great migration” of those who came to live here while working remotely, Baker says. It is currently recalibrating.
“As we saw this great influx of people come into Florida, all of a sudden the demand was much higher than what we’d seen in the past,” Baker says. “With that kind of demand and that kind of rent increase, people got excited about also building and so there was quite a bit of inventory built in 2022 and 2023. Now that kind of peaked – the topline has peaked – and it’s started to dwindle down, but along with that, there’s been a small correction in the marketplace for rent, because it’s all about that balance between supply and demand. So we’ve seen rent decline a little bit around 4 to 5%.”
Rents remain higher than they were pre-pandemic, she says.
One other metric is also trending down slightly.
“Occupancy is a little lower than what we typically have seen, but that’s going to happen in any growth market,” Baker says. “And what you see in growth markets is you see this downturn in occupancy and a little bit of the rent until your absorption takes place. Once your absorption takes place, it gets back up to those kind of numbers that we had just after COVID. We’re probably six months to 10 months out of stabilizing the equilibrium and getting back into balance. I don’t think there’s going to be any problem with us leasing out Gateway Commons.”
Gateway Commons is 15% pre-leased and 5% occupied, Baker says in a mid-July interview. She expects the complex will be 95% leased within 15 months of opening.
One person who has faith in the demand is developer Richard Trzcinski, president of the Tampa-based real estate firm Primerica Group One. The firm built the apartments and owns multiple shopping centers around them.
“It’s such a dynamic, growing area, and I know it because of all the retail businesses we’re landlords to in all those projects commercially around that interstate intersection,” Trzcinski says. Primerica owns Gateway Commons Shopping Center, which is 1.5 miles away and is anchored by Publix. “The center has tremendous velocity in sales,” Trzcinski says.
Jet’s Pizza is the top producing location of four in the area, and Hornback Chiropractic’s Gateway Commons Shopping Center location is its number-one walk-in clinic of five sites, according to Primerica Group.
Those are not the only success stories of the shopping center.
“I can’t disclose the number because working with Publix for many, many years, they just don’t want the world to know their numbers, but they do let the landlord know the numbers,” Trzcinski says. “It’s one of the strongest stores on the west coast of Florida.”
Closer to the apartment complex, Trzcinski is also developing a shopping center “supporting the apartment project.” Residents will be able to walk there. A salon, restaurant and outpatient clinic are nearby. “Other tenants there will be ABC Liquors,” he adds. “We’re very excited about the area.”
