The Tampa Bay land market is undergoing a marked adjustment as developers and institutional investors react to higher interest rates and changing demand. After several years of rapid expansion fueled by pandemic migration, land brokers in the region now report more deliberate acquisition strategies and longer deal timelines.
Bill Eshenbaugh, founder of Eshenbaugh Land Company, has spent decades navigating these cycles. Raised on a Pennsylvania farm and later working in subdivisions during college, Eshenbaugh moved to Florida in 1983 with a homebuilding company before launching his own land brokerage in 1992. By 1997, he focused his business exclusively on land deals.
“The land is unique,” Eshenbaugh says. “When we specialized and pursued further accreditations, our sales really accelerated.”
The most significant change in Tampa Bay’s land market came in June 2022, when interest rates nearly doubled for apartment, multifamily, and single-family construction loans. This shift fundamentally changed how major builders approach land acquisition.
“The builders have taken a while to slow down, because once you get this big engine going with the big national builder, you just can’t stop it quickly,” Eshenbaugh says. “But over the last year, they’ve finally had to slow down.”
Lennar responded by raising $4 billion to launch a new company, transferring much of its land holdings and shifting to a “heavy on cash, light on land” strategy. Other large builders quickly adopted similar approaches, leading to more land-banking deals in which developers assign contracts to third parties before closing.
This adjustment has opened the door for private builders, who previously struggled to compete with national firms. However, overall transaction volume has declined. “Two or three years ago, you might have multiple offers on a property. Today, you may only have a couple or three players for something,” Eshenbaugh notes.
A critical issue in Tampa Bay’s development landscape is the acute shortage of large industrial land parcels. Regulatory changes after the 2008 financial crisis drove this scarcity, as collapsing land values forced banks to unload land loans.
“Lenders stopped lending money on land after 2008,” Eshenbaugh explains. “So landowners today are probably debt-free. It’s also a generational thing – big landowners often have second- or third-generation involvement. They’re not in a hurry to sell.”
This is especially true in agricultural areas, where strong cattle prices make holding land attractive. Live-weight cattle now sell for $4 to $5 per pound, compared to $1 to $2 just a few years ago. Meanwhile, the decline of the citrus industry – due to disease and competition – has freed up high-quality sandy soils that are well-suited for development.
“Land that’s good for citrus is good for houses,” Eshenbaugh notes. “It’s high, it’s dry, and it’s sandy, which orange trees need.”
Developers are now concentrating on the most active land acquisition in northern Manatee County, driven by political decisions in neighboring Hillsborough County. In 2018, Hillsborough elected commissioners who imposed anti-growth policies and maintained strict urban service boundaries.
“Manatee County didn’t have those restrictions, so builders and buyers are willing to drive 20 miles,” Eshenbaugh says. “In the last seven or eight years, we’ve seen nearly every big property in that corridor go under contract for development, with thousands of lots on the way.”
This underscores how local government decisions can quickly reshape development patterns, creating clear winners and losers in the land market.
While insurance costs and hurricane risk draw frequent attention, Eshenbaugh identifies water availability as the most serious long-term challenge for the region. “The biggest risk probably is where we get the availability of potable water over the next 20 years,” he says.
Tampa Bay has invested in desalination plants and reservoirs, but demand continues to rise, especially with the arrival of large data centers that consume substantial water and electricity. The citrus industry’s decline has temporarily eased some pressure, as groves were major water users.
“A lot of citrus has gone out of business because it’s not profitable anymore,” Eshenbaugh notes. “That’s releasing some water back into the supply system.”
Institutional investors looking to deploy significant capital in Tampa Bay land must be prepared for lengthy development timelines and increasing regulatory complexity. Acquiring raw land typically requires 12 to 24 months for zoning approvals, followed by another 12 to 18 months for permitting.
“You’ve got to have some resources. You’ve got to know what you’re doing,” Eshenbaugh advises. “I have one deal now for about 2,000 lots. My buyer will spend a million and a half dollars just on zoning and permitting.”
Regulatory requirements are also tightening. Counties are expanding water-retention mandates and raising flood-elevation standards. Recent storms have led to rebuilding at elevations of 17 feet above sea level, up from the previous five-foot standard, significantly increasing construction costs due to the need for additional fill.
Despite these challenges, Eshenbaugh remains optimistic about Tampa Bay’s long-term prospects. The region has shifted from a place where college graduates left for better opportunities to a top choice for new residents, according to recent surveys.
“We’re equal or better than Charlotte, Nashville, and Austin in many cases, in terms of job formation, incomes, desirability, and weather,” he says.
However, the immediate outlook remains cautious. Eshenbaugh expects conditions to remain essentially unchanged through the first half of 2026, with substantial investment capital waiting on the sidelines until multifamily rental absorption improves.
“There’s demand and a shortage of housing, but the numbers have to work,” he explains. “With interest rates doubling in 2022, it doesn’t work for people trying to develop new projects at the prices we were getting in 2022 to 2025.”
The multifamily sector is especially sluggish, with developers holding off on new land deals until existing projects reach stabilized occupancy. This creates a timing gap, as new projects started now won’t deliver rental units until at least 2028.
Tampa Bay’s land market is moving from the pandemic-fueled boom to a more measured growth phase. Institutional capital remains available, and long-term fundamentals remain strong, but success now requires navigating complex local politics, regulatory hurdles, and infrastructure constraints.
For brokers like Eshenbaugh, this environment demands a higher level of expertise in matching buyers and sellers and in managing drawn-out sales cycles. Firms that excel will be those able to offer clear guidance through the increasingly complicated development process, maintaining strong relationships with both patient sellers and well-capitalized buyers.
As the market continues to adjust, factors such as water availability, insurance costs, and local government attitudes toward growth will increasingly determine where and how development occurs in the Tampa Bay region.
Explore similar articles from Our Team of Experts.
The Las Vegas retail market is experiencing an unusual situation, with vacancy rates at historic lows even as institutional investors remain largely on the sidelines. With retail vacancy at ...
