Navigating Construction's New Reality

Leadership Viewpoint: Jeffrey Forrest, Managing Partner, WPC

As developers across the Sunbelt navigate an increasingly complex construction landscape, certainty, timing, and strategic foresight have become more critical than ever. We sat down with Jeffrey Forrest, President at WPC, to discuss the current challenges—and emerging opportunities—facing multifamily developers in 2025. From volatile costs to evolving lending standards and trade disruptions, Jeffrey shares valuable insights into how developers can plan with confidence and align for long-term success.

Jeffrey Forrest, President, WPC

Q: How would you describe the current state of the construction environment in 2025, and what’s different from past development cycles?

The construction industry is no stranger to cycles of expansion and contraction. Yet the dynamics shaping today’s environment — inflated construction costs, elevated interest rates, and increasing trade volatility — create one of the most complex backdrops for development in decades. At the heart of this complexity lies a reality that many developers and investors are grappling with: traditional project feasibility models no longer pencil as easily. In Central Florida, and across the broader Sunbelt region, developers are adjusting to a new era of risk—and opportunity.

Q: How are construction costs and market conditions impacting the feasibility of new projects?

Over the past 18 months, inflation in labor and material costs combined with higher financing expenses has sharply reduced new multifamily starts. While construction activity remains visible thanks to projects initiated prior to 2023, the industry is entering a lull in new groundbreakings. However, as 2023’s developments complete and stabilize, new capacity is opening across contractors, vendors, and trades. In turn, a more competitive pricing environment is emerging for well-positioned developers. Those able to align projects for delivery into the 2027-2028 window—when demand for quality rental housing is expected to tighten again—may find themselves ahead of the curve.

Q: What financial shifts should developers be most aware of when seeking capital in today’s environment?

One of the most significant—and less visible—challenges facing developers today stems from lending conditions. Higher base rates have not only increased the cost of construction loans but have also elevated lender requirements. Many lenders now demand larger interest reserves to cover potential carry costs, along with stricter debt-to-equity ratios. In some cases, borrowers are expected to bring 35-40% equity to the table, compared to the 20-25% norms of just a few years ago. This shift has paralyzed some development pipelines, as investors weigh the risk of locking in higher capital stacks against the uncertainty of future rent growth. Deals must be structured more conservatively, and timelines must be executed with greater precision to preserve returns.

Q: How are global trade dynamics influencing material availability and pricing for developers today?

Trade policy remains a wildcard in construction planning. Recent tariffs on steel, aluminum, HVAC components, and electrical materials have begun filtering through to bids, with the potential for further escalation. Developers committing to projects today must factor tariff-related cost volatility into their contingency planning—particularly for projects with longer construction schedules.

Q: What role does schedule certainty play in project success in this climate?

In this environment, certainty—not just in pricing, but in scheduling and execution—has become a critical differentiator. A project delivered even three to six months late can erode returns significantly in a high-interest environment. Conversely, early or on-time delivery accelerates stabilization and cash flow, protecting investor yield. Forward-thinking general contractors are adapting by investing in scheduling technology, vendor coordination platforms, and training initiatives that de-risk timelines. At WPC we view optimized preconstruction planning and schedule certainty as core client services—not value-adds. The goal is straightforward: help clients recognize revenue faster and minimize exposure to volatile inputs.

Q: Why do you remain optimistic about the Central Florida market, despite these challenges?

Despite current challenges, Central Florida's long-term fundamentals remain strong. Population growth, corporate relocations, and diversified economic drivers continue to support future housing demand. Developers who can navigate today's complexity and align with capable, forward-looking partners will be well-positioned when the next cycle of growth accelerates. Uncertainty may define the current environment. But it also rewards those who plan thoughtfully, act decisively, and prioritize execution excellence.