Fewer apartment projects are moving forward across Tampa Bay as developers work through thousands of units delivered between 2022 and 2024, a slowdown some developers believe could tighten the market again later this decade.<\/p>\n
LD&D is nearing construction financing for DoMo at Cass Square<\/a>, a 360-unit apartment tower in downtown Tampa, as Bonet says lenders have become more willing to finance apartment projects after nearly two years of higher borrowing costs, slower rent growth and cautious investment activity.<\/p>\n Bonet said many recently completed apartment buildings are now leasing steadily even as fewer new projects enter the pipeline.<\/p>\n \u201cA lot of that inventory is finally getting close to absorbed,\u201d said Diego Bonet, managing partner at LD&D.<\/p>\n Bonet said slower construction activity, combined with continued population and job growth, could tighten apartment supply by 2027 and 2028 if current migration trends continue.<\/p>\n \u201cBy 2028, you\u2019ll probably have very few new apartments delivering into the market,\u201d Bonet said. \u201cThat usually pushes rents higher.\u201d<\/p>\n Higher borrowing costs and stricter lending standards slowed apartment construction across Tampa Bay during the past two years after one of the region\u2019s largest apartment development cycles. In addition, slower rent growth made many projects harder to finance as lenders and investors became more cautious about new deals.<\/p>\n However, Bonet said banks have recently become more willing to finance apartment projects even while equity investors remain selective. He also said borrowing costs have eased during the past year as institutional investors begin returning to development deals after sitting out much of the slowdown.<\/p>\n \u201cThere\u2019s starting to be more interest from institutional players,\u201d Bonet said.<\/p>\n DoMo already has its building permit, Bonet said, and construction financing remains the final major step before work begins on the tower. Meanwhile, developers who are still moving projects forward are generally underwriting Tampa Bay for longer-term growth rather than current rent performance.<\/p>\n Read the latest Tampa news and updates<\/a><\/p>\n \u201cThere\u2019s still very strong population growth and very strong economic growth,\u201d Bonet said.<\/p>\n Bonet also said Tampa Bay continues to attract higher-income households while still adding population overall, which he believes continues to support housing demand across the region. He contrasted Tampa with parts of South Florida, where wealth migration has continued even as overall population growth slowed.<\/p>\n Developers also remain focused on downtown Tampa and downtown St. Petersburg<\/a> because renters continue seeking walkable neighborhoods near restaurants<\/a>, grocery stores and entertainment. In addition, Bonet said younger renters increasingly prefer neighborhoods connected to nearby retail<\/a> and public spaces rather than apartment projects centered on oversized amenity decks.<\/p>\n \u201cIt\u2019s not about what amenity space you have, but rather how well curated it is,\u201d Bonet said.<\/p>\n He said projects surrounding Water Street helped connect parts of downtown Tampa that once felt separated from one another.<\/p>\n \u201cWe\u2019re big believers in the CBDs and the urban locations,\u201d Bonet said. \u201cEspecially younger people moving into Tampa Bay, they want to be close to those amenities.\u201d<\/p>\n Bonet also pointed to recent reporting that ranked Tampa highly for entry-level job growth<\/a>, which he said continues attracting younger workers to the region.<\/p>\n At the same time, broader economic data suggests Tampa Bay\u2019s growth has moderated from earlier post-pandemic highs. A recent University of Tampa economic report described the region as a \u201cstable but soft economy\u201d after several years of rapid growth. The report also found higher interest rates slowed residential permitting across the region.<\/p>\n Read the latest Tampa Real Estate news and updates<\/a><\/p>\n Federal labor data also showed Tampa-area payroll employment declined 0.3% year over year in February 2026.<\/p>\n DoMo remains one of several large apartment developments still advancing near Water Street, the Channel District and surrounding redevelopment areas. Bonet said apartment development will likely remain cyclical because projects often take years to plan, finance and build. As a result, new supply can arrive after market conditions already shift.<\/p>\n \u201cI think naturally development is a boom-and-bust business<\/a>,\u201d Bonet said.<\/p>\n Bonet said Tampa\u2019s next phase of growth will likely depend on attracting larger corporate relocations that bring higher-paying jobs downtown.<\/p>\n \u201cIt supercharges the economy,\u201d Bonet said.<\/p>\n He also said local governments could help projects move faster by modernizing permitting systems, investing in infrastructure and using artificial intelligence tools to shorten review timelines.<\/p>\n \u201cI think AI is extremely well equipped to do that already in its current phase,\u201d Bonet said.<\/p>\n