Stakeholders in Tampa Bay’s development industry predict service demand and construction will cool down in 2025, owing to the impacts of an unprecedented hurricane season and rising costs. Nonetheless, they believe even modest growth highlights the region’s resilience to building challenges.

Will Conroy, president of St. Petersburg-based Backstreets Capital, and Jonathan Moore, president of Tampa’s InVision Advisors, echoed these sentiments to the St. Pete Catalyst following the latest Voice of Architecture survey.

The Tampa Bay chapter of the American Institute of Architects (AIA) released the results of its seventh annual survey on Tuesday. While 66% of local respondents expect service demand to increase in 2025, this figure is significantly lower than the 85% benchmark set in 2022.

“I was excited to see optimism from design professionals in the architectural world,” Conroy said. “Architects are truly the canaries in the coal mine.”

Conversely, he noted that a decline in demand for pre-construction services “portends bad outcomes” for developers. According to the AIA Tampa Bay survey of 96 local architects, 77% expect higher real estate project costs due to Hurricanes Helene and Milton.

Moreover, 42% of respondents believe acquiring construction materials and labor will pose more of a challenge in 2025. When asked about storm-induced permitting backlogs hindering commercial construction, Conroy responded, “Unequivocally, yes.”

“Permits in both the City of Tampa and the City of St. Pete are taking much longer to process,” he continued. “And the reason I mention these two jurisdictions is that they actually deserve a lot of credit.”

Conroy pointed out that the area’s largest cities have fared better than coastal communities with less governmental capacity. He also believes stringent rebuilding regulations will create a more resilient housing stock.

Moore described Tampa Bay as a “fighter.” He stated that the region’s economy remains robust despite recent challenges.

The survey revealed that 80% of his colleagues agree with this sentiment. Like 64% of respondents, Moore’s boutique firm plans to hire additional employees in 2025.

He explained that securing 20 to 30 contracts marks a successful year for InVision Advisors, and that “smart, strategic projects are still moving forward.” Moore emphasized the importance of adaptability, noting that “the storms made labor and materials a bit harder to get in Tampa Bay.”

“Rebuilding isn’t just about putting things back together,” Moore said. “It’s about making things better. The best investment now is one that will prevent damage and costs in the future.”

He highlighted AIA Tampa Bay members have worked to help government officials streamline the application review process, including creating more detailed drawings to increase efficiency.

Both Conroy and Moore agreed steady growth has more long-term benefits than the construction boom of 2022. “You can’t have a market that’s always on a rocket ship,” Conroy said.

He believes the “density game is here to stay,” especially in Pinellas County, which lacks developable space. Conroy, who builds commercial and residential properties, has noticed a “tremendous flight” to elevated neighborhoods.

Conroy praised St. Petersburg officials for increasing allowable density along transit corridors. However, he acknowledged that building apartments is “tough right now.”

“Construction costs, insurance, and interest rates are elevated, while rents are flat at best, maybe falling,” Conroy added. “These are the four major drivers for the success of a multi-family deal.”

The survey indicated that 79% of respondents believe higher interest rates negatively impact their business, and only 34% expect a significant decrease in 2025. Nonetheless, stakeholders see reasons for optimism.

Moore noted Tampa Bay design and construction companies united to repair homes and businesses. “We filled our plate with storm work.”

“There are plenty of opportunities for smart residential growth in downtown St. Petersburg,” Moore said. “Is that another 30-story tower? Maybe, maybe not. There are still many ways to look at this…”

Conroy stated that design professionals remaining cautiously optimistic is “a good harbinger of things to come.” He also emphasized a storm-weary Tampa Bay is “still paradise.”

“We have two really good city governments in St. Petersburg and Tampa,” Conroy reiterated. “I think sometimes you only see that in difficult moments. Even though it wasn’t perfect, city governments in both places responded well to unprecedented disasters.”

AIA Tampa Bay boasts 750 members from Citrus to Pinellas Counties. The organization has assembled an industry panel, including Conroy, to interpret and discuss the report’s results on Feb. 20 at the Center for Architecture & Design.

The event is from 5:30 to 7:30 p.m. at 1208 N. Howard Avenue in Tampa. For more information, visit the website here.

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