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Cushman & Wakefield Executive Director Bruce Erhardt, in a second quarter report on the Tampa Bay area, breaks down the performance of several commercial real estate sectors and outlines trend-lines that may influence the way the markets may be headed amid the COVID-19 pandemic in the region.
On the state of the retail landscape in Tampa Bay as coronavirus has reshaped shopping: “Necessity retailers are strong. The rest of the brick-and-mortar stores are in limbo. This is the hardest sector to determine the outcome and timing of recovery.”
On the industrial market in the Tampa Bay area at the mid-year-point: “This sector has seen the least disruption. Amazon just bought 82 acres in Tampa for $26.4 million.”
On the future for hotels in the Tampa Bay region: “This sector will suffer the worst with occupancies currently reported to be in the 40% range, up from 30% last quarter. We believe the market, overall, because it was strong before the virus, the Tampa Bay area will bounce back faster than other parts of the country.”
(-5%) — (-10%)
Amount of the projected decline in multifamily rental rates in the Tampa Bay area over the next year as a result of the coronavirus pandemic.
2,400,000
Amount of space, as measured in square feet, of Amazon’s planned fulfillment center in Tampa, for which the online retail giant just bought 82 acres. Unlike its other distribution and logistics properties, the company’s new industrial project will rise four stories in height.
2,433,523
Amount of total industrial space, as measured in square feet, under construction in all of Hillsborough and Pinellas counties and in the Lakeland submarket, a Central Florida hub of distribution space prized by logistics firms because of its proximity to 20 million consumers.
6.2% — 7.1%
Percentage of vacant industrial space in Hillsborough and Pinellas counties and the Lakeland submarket. Pinellas has the lowest rate, at 6.2%; Lakeland the highest, at 7.1%; and Hillsborough County’s available percentage is 6.9%.
$5.07 — $7.81
Average cost per square foot for industrial space in Hillsborough and Pinellas counties and the Lakeland submarket. Lakeland, with its predominance of distribution space, is lowest at $5.07; Pinellas County has the highest rate, at $7.81, because of its manufacturing sector; and Hillsborough’s rate stands at $6.54.
4,690,229
Total amount of leasing activity, as measured in square feet, in industrial properties to date in 2020 in Hillsborough and Pinellas counties and the Lakeland submarket.
2,301,112
Total amount of net absorption, or space removed from the market through leasing activity above what is added or subtracted from inventory, as measured in square feet in the Hillsborough and Pinellas counties and the Lakeland submarket thus far in 2020.
11.1% — 13.4%
Percentage of vacant office space in Pinellas and Hillsborough counties at the end of the second quarter. Pinellas’ rate stands at 11.1%, whereas Hillsborough’s is slightly higher at 13.4%.
$23.40 — $27.31
Average rental rates for office space in Pinellas and Hillsborough counties at the close of the second quarter. Pinellas’ average rate is $23.40, while Hillsborough’s average is $27.31. Interestingly, rents in both Tampa’s central business district and the suburban Westshore Business District average above $30 per square foot.
1,409,022
Amount of office space, as measured in square feet, under construction in Hillsborough and Pinellas counties as of June 30. Perhaps surprisingly, all of the new space is in Hillsborough County.
1,377,530
Amount of office leasing activity, as measured in square feet, in Hillsborough and Pinellas counties as of June 30. Hillsborough County enjoyed the overwhelming majority of the activity, with 1,143,304 square feet.
(-248,040)
Amount of negative absorption of office space, as measured in square feet, in Hillsborough and Pinellas counties during the first half of the year. Despite the robust leasing activity, more space came back to the market than was committed to, likely the result of COVID-19-inspired business contractions and completed deliveries of buildings. Here, Pinellas led the way with a negative absorption total of 217,009 square feet.
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