The Panama Tampa Connection

Have you heard the news? If you are like most people you may not have noticed the Panama Canal is experiencing major changes….changes that could potentially impact the Port of Tampa and surrounding Tampa real estate.

The Panama Canal is undergoing major expansion – the largest in its 94 year history – and every major port in Florida is positioning to get in on the action. The $5.25 billion dollar upgrade will double the capacity of the canal by the year 2014 which just happens to be the 100 year anniversary of the canal. As you probably know, the Panama Canal is the major passage between North and South America as well as the Atlantic and Pacific oceans representing a major thoroughfare even in modern times.

The decision to expand the canal came about in response to new mega-sized ships called “Post Panamax” ships which are capable of carrying more than 5,000 mobile home sized containers. Today, mega-ships comprise roughly 1/3 of all container ships but the number is growing exponentially. By 2011, a mere three years from now, it is estimated ½ of all ships will be “Post Panamax’ ships. The expanded canal will be able to double the capacity of the canal and allow ships up to 3x’s the size of the “Post Panamax” ships to pass through. More ships means more trade and bigger ships means more trade…and that means big news for ports throughout Florida including Tampa.

Not only is the Southeastern United States growing rapidly but with the rising price of fuel, it makes more sense to ship directly to the Southeastern states rather than from California as currently practiced. The transition from West coast to east coast has big implications for Florida as well as surrounding real estate.

For example, the bankrupt Channelside condo project might become more attractive to prospective buyers once Tampa was confirmed as a player in the port expansion bids. As it stands, the Tampa condo project is due to go up for auction at a starting bid of just over $17 million for the entire 171 units. With an average starting price of $100,000 per unit for 600 to 3,600 foot Tampa waterfront condos, you might expect developers and investors to be lining up. Unfortunately, the hefty property taxes have frightened away would-be investors who worry about the $900,000 annual bill.