Novare-intowngroup’s Element reverses course to go rental
Tampa Bay Business Journal - by Michael Hinman Staff Writer
TAMPA — Element will welcome the first residents to its downtown Tampa tower as early as January, but those pioneers won’t be new condo commandos. Instead, they’ll be renters.
Novare-intowngroup, builder of the 34-story tower along with its neighboring 32-story sister tower SkyPoint, are working out a deal with lenders Corus Bank in Chicago and ArCap Finance Corp. in Texas to convert Element and its 395 units into high-end rentals now that the condo market hasn’t rebounded.
“We’ve actually seen a lot of demand for rental,” said John Akin, senior VP of development for Novare Group in Atlanta, which partnered with Greg Minder’s intowngroup to build Element. Aiken wouldn’t say how many units were pre-ordered.
Demand exists at the 385-unit SkyPoint, but even with 70 units still unsold, according to county housing records, developers aren’t renting any of them out.
Instead, some buyers who have closed at SkyPoint are renting their units out, Akin said, taking advantage of a rental market and a prime location in the heart of Tampa’s downtown.
Forefront of the future
Novare-intowngroup sent a letter to Element pre-buyers Monday giving them the option of refunding their deposits or simply considering an available unit at SkyPoint instead, Akin said.
Element is not the first planned condo project downtown to move to rental. In February, Mercury Advisors converted 150 of its 392 units at Grand Central at Kennedy in Tampa’s Channel District into rentals, leading the charge for developers to find alternatives to the now soured condo market.
Element will be different, however, because of its vertical nature.
“We think there is going to be a lot of interest in Element because it’ll be the only high-rise luxury rental available,” Akin said. Rental rates weren’t decided, but the market already is demanding at least $1.40 a square foot for similar luxury product, an amount that could climb higher.
Novare-intowngroup may reconsider the condo route in the future if the market rebounds, and that alone could help put projects like Element and Grand Central Kennedy ahead for when buyers start looking to buy in multi-family projects again, said Shawn Poole, regional director of Hanley Wood Market Intelligence.
“They’ve already purchased the product, they’ve already built the product, and they are making some capital now,” he said. “It’s almost like they’re able to land bank it and pull some cash out of it.
mhinman@bizjournals.com | 813.342.2477
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