Downtown St. Petersburg, a vibrant hub known for its local businesses and stunning waterfront, is experiencing significant growth, particularly in its residential and office sectors. However, according to the recent 2024 Downtown St. Pete Development Guide from the St. Petersburg Downtown Partnership, there are still opportunities to bridge gaps in these markets to accommodate the city’s expanding population. This annual report, crafted by St. Pete-based agency Pyper, Inc., offers a crucial snapshot of the economic landscape, aiming to encourage strategic development from both public and private sectors.
Mayor Ken Welch emphasized the city’s proactive approach to growth at the Partnership’s Development Summit on February 27th at The St. Pete Distillery. “St. Pete wasn’t always a vibrant city with intentional development,” he stated, highlighting the transformative projects on the horizon. A key example is the ambitious 86-acre Historic Gas Plant District redevelopment, a collaborative effort between the Tampa Bay Rays and Hines. This project promises to inject thousands of residential units, substantial office space, a state-of-the-art baseball stadium, and other community assets into the downtown core. Such large-scale and infill developments are vital for increasing density and dynamism in St. Petersburg, often referred to as the Sunshine City.
An aerial view showcasing the downtown St. Pete skyline, illustrating urban density and growth.
Jason Mathis, CEO and President of the St. Petersburg Development Partnership, underscored the importance of data-driven planning. “We need to understand what our current situation looks like, and then together, create a shared vision for our future,” he told attendees at the summit. The 43-page 2024 Development Guide provides this crucial understanding, detailing market performance and future needs, complemented by insights from industry experts at the Development Summit.
Downtown St. Pete Population Growth: A Key Driver
Florida’s population is booming, with over 900 people moving to the state daily. Downtown St. Petersburg is directly benefiting from this influx. Over the last five years, the downtown area has seen an impressive 11% increase in population diversity, bringing the total number of residents to 16,800. This significant population growth is a primary factor driving the demand for housing and office space in the city.
A summary graphic from the 2024 Development Guide highlighting the pace of development in downtown St. Pete, reflecting population growth.
Office Market: Demand Outstripping Supply
Sarah Lindemuth, Research Director for the St. Petersburg Downtown Partnership, highlighted the strength of St. Pete’s office market. “St. Pete office market is ‘pulling ahead of the rest’ in occupancy rates,” she noted. The central business district (CBD) boasts a low vacancy rate of 5.6%, significantly better than the national average of 19%.
Wendy Giffin, Executive Director of Cushman & Wakefield, echoed this positive assessment. “Overall, we are the shining star,” she said, while also pointing out the need for more development. “We have new developments underway, but it’s not nearly enough for the demand we are seeing.”
An overview of major office buildings in downtown St. Pete, showcasing the existing office space landscape.
Larry Feldman, President and CEO of Feldman Equities, pointed to evolving office preferences. “Employers desperately want employees back in the office. They are trading up from Class B offices to best-in-class, thinking by having the best amenities and space they will attract employees,” he observed. However, Feldman also expressed concern about keeping pace with Tampa’s office market boom and the challenges of development in St. Pete. He noted the cumbersome processes and high costs associated with land acquisition and construction, warning that these factors could hinder development and potentially turn St. Petersburg into a “bedroom community” rather than a “thriving metropolis” compared to Tampa.
The development guide reveals that downtown Tampa has added 1 million square feet of new office space since 2021, while St. Petersburg currently has over 2 million square feet of commercial space in total. However, this dynamic is set to shift with projects like The Central in the EDGE District, bringing 125,000 square feet of Class A office space, and 400 Central, a mixed-use tower adding 45,000 square feet of Class A office space. The Central is particularly noteworthy as the first non-build-to-suit Class A office development in downtown St. Pete since the 1980s.
Coworking spaces are also playing a crucial role, providing a buffer for the office market. St. Pete has 200,000 square feet of coworking space with a healthy occupancy rate of 86%, supporting entrepreneurs and flexible work arrangements through spaces like Station House, Thrive, Industrious, Rising Tide Innovation Center, and the recently opened COhatch.
Residential Market: High Demand and Rising Costs
Downtown St. Petersburg’s residential market is characterized by high demand and increasing costs. Currently, there are 8,700 existing residential units downtown, with 2,200 under construction and a further 5,900 proposed. Renters constitute a significant majority, at 61% of downtown residents, while homeowners make up 39%.
Key residential market statistics from the Downtown Development Guide, illustrating the balance between renters and homeowners in St. Pete.
The median home cost downtown is $346,900, reflecting a 7% increase over the past year. Renters in the area have a median income of $34,030. The average rent for a studio apartment in downtown St. Pete is $2,459, surpassing the national average of $2,011. While national rent growth is showing signs of slowing, the need for more housing supply in St. Pete remains critical to manage costs.
Trends in the composition of residential units in downtown St. Pete, highlighting the types of housing available.
To address housing affordability, St. Petersburg is focusing on increasing supply through vertical development and innovative zoning solutions. The city’s 10-year housing plan includes incentives and zoning adjustments like the Neighborhood Traditional Mixed Residential (NTM-1) zoning, which allows for higher density, potentially up to four units on numerous parcels. Furthermore, the Live Local Act in Florida is designed to promote affordable housing development by permitting it in areas where it was previously restricted and offering tax benefits to developers.
Broader Economic Indicators
Beyond office and residential sectors, downtown St. Pete demonstrates robust economic health:
- Hotel Industry: 1,749 hotel rooms exist, with 317 under construction and 811 in the planning stages, indicating a strong tourism and visitor economy.
- Job Market: The city has experienced a 66% net job growth over the last 25 years, with 32,000 jobs based downtown. Health services and leisure/hospitality are leading industries.
- Local Economy: $68 of every $100 spent at local businesses stays within the community, emphasizing the importance of supporting local enterprises.
- Arts and Culture: The local arts industry contributes a significant $133 million economic impact and supports 2,121 jobs, highlighting the cultural vibrancy of St. Pete.
For a comprehensive overview, the full 2024 Development Guide is available here.
In conclusion, St. Petersburg is experiencing notable population growth, which is driving significant development across various sectors, particularly in the office and residential markets. While the city is successfully attracting new residents and businesses, strategic and sustained development efforts are crucial to maintain affordability and ensure St. Pete’s continued prosperity as a thriving urban center within the Tampa Bay region.
