Riverfront Apartments Start With $48M Loan

TAMPA, FL-Locally based Garrison Developer Group has secured a $48-million loan to proceed with The Preserve at Alafia, a 351-unit riverfront luxury apartment complex on the city’s east side. The FHA-backed financing was arranged through the Birmingham, AL office of Prudential Huntoon Paige Associates Ltd.

The apartments represent the first of three phases of Alafia Crossing, a $100-million mixed-use project along the Alafia River near Interstate 75 that will also include hotel, office and retail segments. Apartments will begin leasing later this year and the balance of the complex should open next summer.

“Extensive market research demonstrates that The Preserve at Alafia will fill a strong need in the Tampa area for upscale rentals located in an extraordinary waterfront setting that has previously unavailable to renters,” says Rey Ortega, president of Garrison. Asking rents for the apartments will average $1,000 monthly, he says.

Developers in the Tampa Bay market are expected to complete only 1,000 rental units this year as overall demand for apartments remains subdued, according to research by Marcus & Millichap Real Estate Investment Services. Vacancy is forecast to rise only slightly to 10.8%, while asking rents are projected to fall 3.8% to $767 per month.

“Hillsborough County submarkets will fare somewhat better as completions slow,” states Marcus & Millichap’s latest apartment report. “Still, sluggish demand will be the dominant factor behind apartment performance marketwide, forcing owners to continue to offer concessions to maintain sufficient occupancy levels in order to cover mortgage-related expenses.”