Commercial real estate brokerage firm JLL says industrial demand — and construction — is likely to continue well into the future in Tampa Bay, as housing growth and e-commerce fuel spikes in both demand and inventory. With population in-migration, the region is one of just three U.S. industrial markets the brokerage has pinned to watch moving forward.
On the drop in industrial vacancy brought about by the growth of e-commerce and the COVID-19 pandemic’s influence on daily life: “The Tampa Bay industrial market closed Q2 2021 with the lowest total vacancy rate since the end of 2018. Vacancy decreases were driven by major industrial move-ins throughout the quarter. In fact, Q2 2021 had the highest level of positive quarterly absorption recorded in the past five years.”
On a surge in development thus far in 2021: “Strong market fundamentals have bolstered developer confidence to kick off more construction projects, closing the quarter with the highest amount of active construction projects in Tampa Bay history.”
On the upward movement of industrial asking rents: “Asking rents have continued their upward trajectory, averaging at or above $6.00 (per square foot) for the past five quarters. Asking rents for new construction and recently completed product have risen to the highest level on record.”
On the influence of sustained population in-migration: “The metro is one of the top growth markets in terms of population over the past five years. And as the pandemic pushed more people to spend more time at home, the housing market is tightening further with people looking for bigger houses.”
On the outlook for continued growth: “Limited deliveries over the next three to six months should facilitate additional occupancy gains in existing product over the coming quarters. This tightening could result in further asking rent increases, especially in new construction.”
Amount per square foot of the average asking rent for industrial space in the Tampa Bay area at the end of the second quarter of this year. By comparison, the rate was roughly $4.00 per square foot at the same point in 2010.
Percentage of growth in average asking rents year-over-year in the Tampa Bay area as compared to June 30, 2020.
Amount of new speculative industrial space, as measured in square feet, that has commenced development over the past six months in Tampa Bay.
Amount of net absorption of industrial space, in square feet, in the Tampa Bay area through the end of the second quarter.
Amount of new industrial space under construction, in square feet, in Tampa Bay at the close of the second quarter. Interestingly, all but 10% of the new space is being developed in the East Tampa submarket.
Average industrial vacancy rate in Tampa Bay as of June 30. By comparison, the rate stood at 12% in 2009.
Amount of industrial space, in square feet, available in the Tampa Bay area through sublease opportunities.
Amount of new industrial space, in square feet, that has been delivered in the Tampa Bay area in 2021 through the second quarter.
Highest asking rent for industrial space, on a per square foot basis, in the Tampa Bay area at the end of the second quarter. The rate is sought in the Westshore/Airport submarket, where more than 500,000 square feet is being developed.
Tampa Bay’s ranking for new industrial space demand among 60 top U.S. markets. Atlanta was ranked first.
Tampa Bay is one of just three markets nationwide that JLL has tapped in mid-2021 to watch for further significant industrial growth, together with Columbus, Ohio, and Savannah, Georgia.