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.
LD&D is nearing construction financing for DoMo at Cass Square, 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.
Bonet said many recently completed apartment buildings are now leasing steadily even as fewer new projects enter the pipeline.
“A lot of that inventory is finally getting close to absorbed,” said Diego Bonet, managing partner at LD&D.
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.
“By 2028, you’ll probably have very few new apartments delivering into the market,” Bonet said. “That usually pushes rents higher.”
Higher borrowing costs and stricter lending standards slowed apartment construction across Tampa Bay during the past two years after one of the region’s 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.
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.
“There’s starting to be more interest from institutional players,” Bonet said.
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.
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“There’s still very strong population growth and very strong economic growth,” Bonet said.
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.
Developers also remain focused on downtown Tampa and downtown St. Petersburg because renters continue seeking walkable neighborhoods near restaurants, grocery stores and entertainment. In addition, Bonet said younger renters increasingly prefer neighborhoods connected to nearby retail and public spaces rather than apartment projects centered on oversized amenity decks.
“It’s not about what amenity space you have, but rather how well curated it is,” Bonet said.
He said projects surrounding Water Street helped connect parts of downtown Tampa that once felt separated from one another.
“We’re big believers in the CBDs and the urban locations,” Bonet said. “Especially younger people moving into Tampa Bay, they want to be close to those amenities.”
Bonet also pointed to recent reporting that ranked Tampa highly for entry-level job growth, which he said continues attracting younger workers to the region.
At the same time, broader economic data suggests Tampa Bay’s growth has moderated from earlier post-pandemic highs. A recent University of Tampa economic report described the region as a “stable but soft economy” after several years of rapid growth. The report also found higher interest rates slowed residential permitting across the region.
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Federal labor data also showed Tampa-area payroll employment declined 0.3% year over year in February 2026.
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.
“I think naturally development is a boom-and-bust business,” Bonet said.
Bonet said Tampa’s next phase of growth will likely depend on attracting larger corporate relocations that bring higher-paying jobs downtown.
“It supercharges the economy,” Bonet said.
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.
“I think AI is extremely well equipped to do that already in its current phase,” Bonet said.
https://tbbwmag.com/2025/12/05/125m-mixed-use-project-st-pete-demolition/For LD&D, Bonet said the decision to continue advancing DoMo comes down to the company’s long-term outlook on Tampa Bay.
“Five years out, 10 years out, is this a market where we want to be?” Bonet said. “For Tampa Bay, the answer is 100% yes.”
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