By Tim Coop
The coronavirus is not derailing Tampa Bay’s economic growth in 2021. In fact, according to Tampa Bay’s Voice of Architecture Economic Outlook 2021, while other areas of the nation experience a downturn in real estate development-related activity this year, our region is positioned for expansion.
The recent survey of Tampa Bay’s architects, which serves as a predictive indicator of future development and construction activity, reflects a surprisingly optimistic outlook for the region’s development-related economy in 2021, despite the COVID-19 pandemic.
Architects are engaged, early, in the process of any project with completion typically coming one to three years after architectural work begins. As a result, architects have their finger on the pulse of forthcoming market activity before anyone else. The annual survey is conducted by American Institute of Architects, Tampa Bay (AIA Tampa Bay) and of the 104 respondents in the survey, 85% of the architects were either principals or managers, which further adds credibility to the results.
While some real estate products, such as hospitality and retail, may warrant caution, we see reason for optimism in numerous property types. Throughout Tampa Bay, there is significant lending in multi-family, industrial warehouse/flex, single-family homebuilding and health care.
In terms of the overall outlook, here are four takeaways from this year’s survey and from the discussion at a recent AIA Tampa Bay panel event which included Jason Jensen of Wannemacher Jensen Architects, Keith Greminger of Stantec and Nicole Popovics of Sembler Co..
Takeaway # 1: Most architects see a robust 2021.
According to the survey, 71% of the architects think Tampa Bay’s real estate development-related economy will be “excellent”, or “good”, in 2021 with only 29% forecasting it will be “fair.” No one predicted “poor” or “very poor.”
The survey also showed that 70% expect demand for architectural services in the Tampa Bay area to increase in 2021 – down only 7 percentage points from last year’s pre-coronavirus predictions. Busy architects in Tampa Bay mean good news for the region’s development-related growth.
Of interest, architects see health care and industrial/distribution as the fastest-growing sectors of the area’s economy, with slower growth expected in the office space market.
Takeaway # 2: A fresh influx of migration is aiding the rebound
Our AIA panel agreed that Tampa Bay has become a magnet for population migration from other parts of the country, with new residents from larger metro areas like New York, Chicago and Washington, D.C. moving here at an increasing rate since COVID-19. Our region’s hard-to-match mix of sunshine, beaches, outdoor activities, culture, professional sports and a relatively affordable cost of living are no longer a well-kept secret.
Takeaway # 3: Tampa Bay architects are faring better than many others in the South
A separate AIA survey of architectural firms in the broader Southern U.S. region showed substantial year-over-year decreases in billing for architecture services and less optimism regarding 2021’s outlook, according to a December 2020 report.
In sharp contrast, more than half of architects in the Tampa Bay area estimate their organization, or department, will hire more employees in 2021; and a large majority, 86%, anticipate revenue growth, with 33% expecting robust growth of 10% or more in revenues.
Takeaway # 4: While the overall outlook appears bright, risks remain
Generally speaking, this all bodes very well for Tampa Bay’s economy in 2021. But, obstacles, and risks, remain, such as the possibility of another wave of infections, transportation challenges that increase as our population grows and increasing commodity and labor costs.
All things considered, Tampa Bay’s position coming out of the pandemic is likely the envy of most other regions around the country.
Tim Coop is Hancock Whitney’s Regional President for Tampa Bay.
