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Market Spotlight | Tampa Office Market
Tampa’s office market has benefited from a relative lack of new construction and solid job creation over the past four years, which has whittled down vacancies, pushed up rents and added significant value for owners looking to sell to new investors.
Both in downtown Tampa and in the more suburban Westshore submarket, activity has been healthy and steady, with relatively large leases from Brighthouse Financial at Dilweg Cos.’ Tampa Oaks One and PwC’s deal for 160,000 square feet at MetWest III, now under construction, among others.
That activity has spurred investment sales as well, led by the $143.1 million sale of the twin-towered Urban Centre in Westshore, which was purchased in early March by Starwood Capital Group.
In turn, construction on select projects has begun, including at MetWest and Renaissance Center, which has plans for an additional two projects that would augment the now six office buildings existing.
$26.69
Per square foot rental rate for Tampa office buildings as of March 31. By comparison, the rate stood at $17.97 per square foot throughout the Tampa, St. Petersburg and Sarasota markets at the beginning of 2013. For the entire market across classes, average office rents stand at $20.89 per square foot.
6.7%
Vacancy rate for Tampa central business district and Westshore submarkets at the end of the first quarter, mirroring that of the entire Tampa-St. Petersburg market for the first three months of 2018. At the start of 2013, the rate marketwide was 13.1%.
338,407
Amount of space, in square feet, absorbed through leasing activity in the first three months of 2018 in Tampa’s downtown and in Westshore. By comparison, the entire Tampa-St. Petersburg submarket had positive net absorption of just 210,430 square feet during the first quarter.
148,800
Amount of space, as measured in square feet, of Renaissance Center VI, an office building developed by New Jersey-based Vision Properties LLC. Begun as a speculative project on the 71-acre suburban campus, AAA Auto Group leased the entire building shortly after construction commenced. Vision Properties completed the building earlier this year.
214,516
Amount of new office space, in square feet, delivered throughout the Tampa-St. Petersburg market during the first quarter of 2018, in nine buildings. Renaissance Center VI makes up the overwhelming majority of the new space.
230,000
Amount of space, in square feet, of the largest new office building under construction in Tampa as of March 31. The $172 million University of South Florida Morsani College of Medicine, slated for completion in 2020, will become an early anchor of developer Strategic Property Partners’ planned $3 billion Water Street Tampa project.
667,540
Amount of space, in square feet, of all office under construction throughout the entire Tampa-St. Petersburg market at the end of the first quarter of this year.
Source: CoStar Group
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