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Residential and Office Space Tailwinds, Coupled
With Lasting Household Spending, Aid Tampa Retail
Resilient consumer base bolsters sector. Total retail spending in Tampa-St. Petersburg grew 5.3 percent year over year ended in the second quarter, ranking third-fastest among major U.S. markets. Over the same period, the metro saw a decade-low level of construction, opening only about 940,000 square feet. This slowdown in new supply, paired with a net in-migration projected to exceed 33,000 individuals in 2024 for the 12th-straight year, drives retailers to compete for the limited available space in anticipation of growing consumer demand. Over the past year ended in June, more than 1 million square feet of retail space has been absorbed on net, pushing the vacancy rate to a record low for the market at 3.2 percent. The multi-tenant segment saw stronger gains than its counterpart from this demand, noting a 40-basis-point drop in vacancy to 4.1 percent as of June.