Industry Experts Cautiously Optimistic About 2023

BUILDERS’ BREAKFAST | JANUARY 31

By Christine Andola | Moxē Integrated Marketing

Winds of change giving way to pockets of opportunity forecasted for the Orlando-area building industry according to a unique panel, including land services, geotechnical, architectural, and financial expertise.

Panelists (from L to R): Matthew Sloan, P.E., CGC, ECS Florida; Ben Lalikos, Cogent Bank; Chad Wentz, AIA, IIDA, Little; (moderator) Ben Goodin, Baker Concrete Construction; and Trevor Hall, Jr., Colliers

(Photo courtesy of Moxē Integrated Marketing)

Changes in the market over the past 12 months can be illustrated from many vantage points. “At this time last year, interest rates were zero,” Ben Lalikos, SVP at Cogent Bank said. “Inflation and higher interest rates have made the lending world difficult.”

“At the beginning of 2022, you couldn’t sign a proposal fast enough and get on site to start the work before someone was asking for the report,” Chad Wentz, studio principal at Little, recalled. “We’re still busy, but our deadlines are not that tight right now.”

Trevor Hall, executive managing director at Colliers, added, “A good sense of humor helps, especially at times like this.” He continued, “It’s never been more true that change is constant.”

Slow But Not Stopped

Despite the overall slowdown in the building industry over the last 12 months, there is still growth in some areas, such as healthcare, retail and the public sector.

The Orlando population grew 1.8% from 2021 to 2022, according to Macrotrends, and AARP reports that by 2040, 1 in 5 Americans will be over age 65. Increased mortgage rates are driving the demand for multi-family housing while the need for assisted living and healthcare is also increasing. “Infrastructure is pushing out into the suburbs where you can find the land you need to build these larger projects,” explained Sloan.

Development in the private sector has slowed but the public sector is still strong, primarily due to money from the federal government. “Municipalities have been flush with cash and are under pressure to use those funds or forfeit them,” Lalikos pointed out.

“Federal dollars are [also] available to incentivize sustainable building,” said Wentz.

The completion of the project connecting SR 429 and SR 417 at Interstate 4 will open areas like Sorento and Apopka for building opportunities. Connecting outlying areas facilitates Orlando’s horizontal growth, while there is little vertical growth. “Vertical growth in this region requires more geotech work and ground supports. The costs do not make sense when you can spread out,” offered Sloan.

An influx of population to the Orlando area and the general aging of our population presents other areas of potential growth. “There was an over-saturation in senior living six or seven years ago, but the aging population is bringing opportunities back to that space,” added Lalikos.

Building Advocacy

According to the panelists, applying the political lens does not dampen the forecast. “The political climate is headlines but does not drive our industry,” Sloan stated.

Hall offered another approach, “When you’re in the stream, you can’t change the direction of the current. You just have to find your way through it.”

“It is difficult for any of us to affect change in the political realm, but ABC, as an organization, is very good at advocating for our industry,” Goodin added to wrap up the discussion.

Finding Opportunities

“This is my sixth correction in the Orlando market, but this one doesn’t have the debt pressure we’ve had in the past,” explained Hall. “One way to find building opportunities is to follow the road money.”

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