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Market Report

Tampa-St. Petersburg Office Investment Forecast

2020 Outlook

Tight Vacancy Prompts Construction Pipeline Expansion; New Inventory Draws Additional Buyers

Skilled labor force, favorable tax rate and quality of life luring businesses. Employers moving to and expanding in Tampa Bay have created a healthy demand for office space amid a restrained delivery schedule over the past 10 years. As a result, vacancy is resting near the cyclical low, encouraging a boost in construction. During 2020, inventory additions will maintain last year’s heightened pace and approximately 70 percent of the space is already pre-leased, lessening the impact on vacancy. Nonetheless, multiple buildings entering lease-up at once may temporarily nudge vacancy up and suppress rent growth in some submarkets. Heights Union is the largest development due in 2020. The project in downtown Tampa encompasses two buildings, each at 150,000 square feet with AxoGen and WeWork as major tenants. Speculative construction is also on the rise with nearly 900,000 square feet underway. The majority of space is in the prominent downtown Tampa and Westshore neighborhoods and is expected to be delivered in 2021.

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