Tampa Office Market
Annual full-service asking rental rates reached a new high at $28.73/SF, a 3.6% increase year over year at the end of the first quarter of 2024. Vacancy rates remained relatively flat, increasing by 30 basis points quarter over quarter and decreasing by 40 basis points year over year. The under-construction pipeline continues to remain muted in the market, with 428,929 SF under construction, accounting for just 0.7% of the market’s inventory. Leasing activity ended the quarter at 1.3 MSF, outpacing the 16-year first-quarter quarterly average of 1.2 MSF and reflecting an increase of 19.5% year over year
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The market reported 538,101 SF of positive absorption in the first quarter of 2024, resulting in the lowest first quarter net absorption since 2013. Overall rental rates declined from the historical high in 2023 by 6.2% to $7.71/SF but continued to remain elevated. Construction pipeline declines from quarterly highs in 2023 to 717,594 MSF of deliveries as of the end of the first quarter of 2024. Meanwhile, under construction slightly increased by 5.0% quarter over quarter to 8.4 MSF under construction. Following yearly supply outpacing demand for the fifth consecutive quarter, vacancy increased by 160 basis points year over year to 7.0%. Landlords leased a large amount of bulk space over the past years, improving the bulk-space segment that had been dragging down the market.
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