Tampa Bay area architects are predicting only modest growth for the region’s development-related economy in 2023, which is in stark contrast to the stronger economic predictions of previous years, according to AIA Tampa Bay’s Voice of Architecture Economic Outlook 2023.
The Voice of Architecture’s survey of 123 area architects serves to predict the future for area real estate development and construction activity. Architects are experts on gauging the outlook for the development-related economy because they are hired early in the development process, with projects often being completed one to three years after the architecture firm begins work.
In the survey, conducted by the Tampa Bay chapter of the American Institute of Architects, 59% of the architects expect demand for architectural services in the Tampa Bay area to increase in 2023 – a decrease of 25 percentage points from last year’s predictions, when 84% of the architects foresaw increased demand.
Also, a smaller percentage of the architects, 73%, think the Tampa Bay area’s development-related economy in 2023 will be “excellent” or “good,” a decrease of 15 percentage points from 2022’s figure of 88%.
Also, 24% predicted the 2023 economy will be “fair,” an increase of 17 percentage points from the 2022 result when only 7% forecast the economy would be “fair.”
“Certainly, the overall outlook is positive,” said Jonathan Moore of InVision Advisors, an architect who consults with architecture firms around the area. “But even though the Tampa Bay area is faring better than many parts of the country, the survey shows we are not immune from the challenges facing the economy right now.”
In other results from the survey:
• 70% of the respondents anticipate revenue growth for their firm in 2023, down from 77% in 2022, and only 11% expect robust growth of 15% or more in revenues, down from 33% in 2022.
• 53% said inflation has impacted their business or organization.
• 81% said their projects have been impacted by supply chain issues.
• 25% said they would not continue remote work practices in 2023 that were in place in 2022.
“There’s no doubt that inflation and supply chain challenges are impacting the viability of projects, which in turn means some projects will be reduced in scope or may be delayed,” said Trey Korhn of Valley Bank, which lends to developers on new developments. “We are considering these issues in as we work with borrowers on projects, knowing that costs continue to be a challenge.”
Of the 123 respondents in the survey, 79% of the architects were either principals or managers. Most respondents were from Hillsborough County or Pinellas County, though many of the architects in the two counties work on projects throughout the region.
Tied to the local survey, AIA Tampa Bay has assembled a panel representing the architecture, real estate lending, real estate development and construction fields to interpret the results of the report.
The panel discussion event will be held on Tuesday, February 28 at 6 p.m. at DPR Construction’s Tampa office at Heights Union East, 2002 N Tampa Street, a block from Armature Works. Registration is available through the www.aiatampabay.com calendar.
The panel:
• Jonathan Moore, AIA, Invision Advisors, and the 2023 chapter president of AIA Tampa Bay, who works with a wide range of architects on area projects.
• Trey Korhn, Valley Bank, one of the area’s top commercial real estate lenders, with involvement in Tampa projects like Armature Works, Gas Worx, Midtown Tampa and the Epicurean Hotel.
• Rodney Riley, RSR Capital Advisors, which is planning a mixed-use development in the Clearwater Marina District. Plans call for condos, office, retail and a hotel closer to the Intracoastal Waterway and workforce housing in the eastern part of the district.
• Brian Robbins, DPR Construction, which has worked for clients like Tampa International Airport, City of Tampa, and Moffitt Cancer Center.
The panel discussion will be moderated by Kyle Parks, whose firm, B2 Communications, represents a number of companies in the real estate development industry.
“It’s a rapidly changing environment for real estate development, and that can contribute to volatility in the economy,” said Brian Robbins of DPR Construction. “The AIA survey is a solid barometer of where we are heading, though, and it’s good to see that our area remains positive.”
Added Rodney Riley of RSR Capital Advisors: “The Tampa Bay area continues to be one of the best spots in the country for real estate development, because the continued influx of residents insulates us a bit from economic challenges. That said, this will definitely be a more challenging year than 2022 for many in our industry.”
About the AIA:
The American Institute of Architects (AIA) is the professional association for architects and those in the architecture field. AIA Tampa Bay is the regional chapter representing 700 members in Hillsborough, Pinellas, Polk, Hernando, Citrus, Sumter and Pasco counties. The AIA provides programs and services including educational programs, design competitions, community service programs and serves as the united voice of the architecture profession. For more information, go to www.aiatampabay.com or call 813-229-3411.