Why we are not buying in Tampa this year

The position, stated before the argument

We are not buying in Tampa this year. We like the metro structurally, we expect to buy here eventually, and we think it is currently priced for a recovery that the employment data does not yet show.

Three things drive that. The labor market is the slackest in our Southeast coverage: total nonfarm employment grew 0.6 percent over the twelve months to July 2026, unemployment sat at 4.8 percent, and five of ten sectors contracted.¹ Rent burden is heavy, with renters paying roughly 25 percent of income, above most of our Southeast coverage.² And insurance is a structural expense problem rather than a line item that normalizes on a schedule.

Publishing this is deliberate. A sponsor who only ever explains the markets they are buying has given you half a process, and the half they withhold is the one that tells you whether they have a process at all.

The employment picture is the binding constraint

Rent growth is downstream of income growth, and income growth is downstream of employment. Tampa's employment picture is the weakest we have measured in the Southeast.

Total nonfarm employment grew 0.6 percent over twelve months to July 2026, with unemployment at 4.8 percent, and five of ten sectors contracted over the period.¹ That is not a market in decline. It is a market that has stopped adding the jobs a rent growth assumption would need.

The concentration matters more than the percentages. Financial activities and information both cluster in the submarkets carrying the highest basis, so the sectors contracting are the ones supporting the rents that the most expensive product depends on.

A single sector growing is thin support for a metro-wide rent growth assumption. Pull it yourself from BLS Economy at a Glance¹ and check household income and tenure against data.census.gov.³

Rent burden is the ceiling nobody models

Rent growth assumptions are usually justified by demand. They are constrained by affordability, and affordability is measurable.

On our calculation from published income and rent figures, Tampa renters pay roughly 25 percent of income toward the median rent, which is heavier than most of our Southeast coverage though below Miami-Fort Lauderdale at 30.6 percent.² The same calculation gives roughly 24.5 percent in Dallas, 24.4 percent in Nashville, 22.4 percent in Charlotte and 22.0 percent in Charleston.²

Read those together and the point is not that Tampa is unaffordable. It is that Tampa has less headroom than the markets it is priced alongside. A rent growth assumption has to come out of income that is already more committed to housing than in the comparison set, in a metro where employment grew 0.6 percent.

Ownership is not the release valve either: 61.5 percent of households own in Hillsborough County,⁴ so the renter base is a defined population rather than an overflow from a housing market that might loosen.

This is our own qualitative read from public figures rather than a licensed index, and the sources are cited so you can run it differently and reach a different answer.

Insurance is an expense problem, not a line item

In most markets insurance is a line you grow at an assumed rate. On the Florida Gulf coast it is a structural variable that can move enough in one renewal to change whether a deal works.

Two things make it different in kind rather than degree. The exposure is real and repeating, so pricing responds to catastrophe experience rather than to general inflation. And the market structure includes a state-created residual insurer, Citizens Property Insurance Corporation,⁵ whose role and rates are a policy question as much as an actuarial one. The Florida Office of Insurance Regulation is the regulator and publishes on the market.⁶

The underwriting consequence is that a Tampa model carrying last year's premium grown at a general rate is not conservative, it is unanchored. And the deductible structure matters as much as the premium, because a separate named-storm deductible is a large potential cash requirement sitting outside the operating budget.

Ask for the current premium, the renewal date, what the last two renewals did, and the named-storm deductible in dollars. Any Florida sponsor should have those four numbers immediately.

The other Florida expense line that moves on sale

Insurance gets the attention. Property tax deserves equal scrutiny in Florida and gets far less, because the mechanism is less visible.

A sale can trigger reassessment, so the tax bill the seller paid is not the bill the buyer will pay. A model carrying the seller's figure forward understates expenses for the entire hold, and the error compounds into the exit value as well, because the overstated net operating income is capitalized at sale. The seller's trailing twelve is accurate and it is not predictive.

Both lines share a property that makes them dangerous together: each is discoverable before you invest, and each is routinely carried forward from the seller's statement because doing so makes the deal work. In a market where the employment picture is already thin, two understated expense lines are the difference between a deal that clears and one that does not.

Ask for the modeled year one expenses against trailing actuals, line by line, with an explanation for every line that goes down. On a value-add plan, expenses falling deserve a specific reason.

What we do like, said plainly

A case against a market that lists only negatives is advocacy, not analysis. Tampa has real structural strengths and they are why we expect to buy here eventually.

Education and health services is growing at 2.6 percent and is the most durable demand anchor a metro can have, because it is tied to population rather than to a business cycle.¹ Florida has no state income tax, which supports in-migration independently of local employment. The metro has genuine geographic constraint, water on multiple sides, which limits how much land is available for the pipeline to expand into.

And rent burden at roughly 25 percent, while heavy relative to our coverage, is well below the coastal California and New York levels where affordability becomes a political question rather than an economic one.²

So the position is timing, not thesis. We are not saying Tampa is a bad market. We are saying it is currently priced as though the recovery has happened and the employment data says it has not.

Supply is the variable we are least certain about

The employment and burden figures are measured. The supply picture is the part of this view carrying the most uncertainty, and saying so is more useful than pretending otherwise.

Geographic constraint cuts both ways here. Water on multiple sides limits where the pipeline can expand, which supports existing stock over time. It also concentrates whatever does get built into the same corridors, so a metro-level delivery figure understates what a specific asset faces. A submarket can be oversupplied while the metro looks balanced.

That makes the trade area analysis more important in Tampa than in a metro that sprawls freely. Ask any sponsor how many units are permitted within the trade area they have drawn, why they drew it there, and what share of those units competes on price and product with the subject property. Permits by jurisdiction are public in the Building Permits Survey,⁷ and multifamily permits lead deliveries by roughly one to two years.

Our position holds regardless of how that resolves, because it rests on employment and price rather than on supply. But a reader running this analysis independently should know which leg is measured and which is inferred, and this is the inferred one.

What would change our mind

A view that cannot be falsified is not a view. Three things would move us.

Employment breadth. Not a headline number, but sectors beyond education and health services returning to growth, particularly trade, transportation and utilities given it is the second largest employer here.¹ Two consecutive quarters of broadening would matter more than one strong month.

Insurance stabilizing. Two consecutive renewal cycles without a sharp increase, across properties rather than at one asset, would change the expense assumption from a variable into a line.

Basis. Prices reflecting the employment picture rather than the migration story. A market can become buyable on price alone without any fundamental improving, and if entry prices fall to where flat rents still produce an acceptable return, the case changes without anything else changing.

Supply is checkable throughout from the Building Permits Survey⁷ and regional vacancy from Housing Vacancies and Homeownership,⁸ with independent metro context in HUD's Comprehensive Housing Market Analyses⁹ and rent floors in Fair Market Rents.¹⁰

What this page is not saying

Precision matters when a sponsor publishes a negative view of a market other people are actively buying, so it is worth marking the boundaries of the claim.

We are not saying Tampa will perform badly. We are not saying anyone buying here is wrong. Other sponsors have different mandates, different return targets, different holding periods and different costs of capital, and a market that does not fit our strategy can fit theirs perfectly well.

We are also not forecasting. The employment figures are measurements of a period that has already happened, not predictions of the next one, and a market can turn before any of it shows up in a release.

What we are saying is narrower and it is the only claim we can support: on the data currently published, at prices currently being paid, this market does not clear our underwriting, and the specific things that would change that are listed above. That is a statement about fit and about price, and it carries a date.

Read it alongside the markets we are buying rather than on its own. A decline is only informative next to the acceptances, which is why all 49 write-ups are published together across the market guides rather than as a list of favorites.

Why we publish the markets we decline

A sponsor's list of markets they like tells you where they want to deploy capital. It does not tell you whether they have a method, because a method is only visible where it produces a no.

We publish the case against a market as readily as the case for one, across all of the market guides. That is not a courtesy. It is the only way an investor can check whether our stated process actually constrains what we buy, or whether it is a description written after the fact around deals we had already decided to do.

You can hold this page against us. If we buy in Tampa next year, the three conditions above are what we should be able to point at, and if none of them has moved you are entitled to ask what changed.

The full market write-up with submarket detail is at the Tampa guide, and how we evaluate any market is at multifamily underwriting explained.

What would change our mind

1. Has insurance been quoted at this asset, in writing, within the last ninety days?
2. Does the model carry the seller assessed value forward, or does it assume a reset on sale?
3. What rent growth does the pro forma assume in years one and two?
4. What share of the rent roll works in leisure and hospitality?

What this is built on

1. U.S. Bureau of Labor Statistics, Economy at a Glance, Tampa-St. Petersburg-Clearwater, FL
2. Grey Oaks calculation from U.S. Census Bureau income and rent data, Rent burden comparison across covered markets
3. U.S. Census Bureau, data.census.gov
4. U.S. Census Bureau, QuickFacts, Hillsborough County, Florida
5. Citizens Property Insurance Corporation, Florida residual property insurer
6. Florida Office of Insurance Regulation, Property insurance market regulation
7. U.S. Census Bureau, Building Permits Survey
8. U.S. Census Bureau, Housing Vacancies and Homeownership
9. U.S. Department of Housing and Urban Development, HUD User, Comprehensive Housing Market Analyses
10. U.S. Department of Housing and Urban Development, HUD User, Fair Market Rents