Market Overview – Tampa, Florida

Tampa’s industrial market has experienced vigorous growth over the past few years, marked by brisk leasing activity, historical rates of net absorption, and strong rent growth. The market’s eastern edge is positioned along Central Florida’s pivotal Interstate 4 corridor connecting Tampa to a major distribution hub in Lakeland as well as to the highly populated Orlando area. Additionally, it benefits from immediate connectivity with the growing Ocala area. Net absorption of industrial space has been robust in Tampa, with 3.8 million square feet absorbed over the trailing 12-month period.

Highlights

• Total industrial vacancy has declined in the last year to 4.1 percent.
• Over the last year, 500 industrial properties traded hands for a total of $1.5 billion in transaction volume.
• Industrial rents in Tampa remain on an upward trajectory, rising by 13.9 percent over the trailing 12-month period.
• Development activity remains vigorous with 5.3 million square feet of new industrial space under construction.

Vacancy | Rent | Construction

The current industrial vacancy rate in Tampa is 4.1 percent, one of the highest within Florida’s major markets but in line with the national benchmark rate. Strong anticipated tenant demand will likely keep vacancy tight in the four to five percent range for the next few years despite a growing construction pipeline. There has been a steady acceleration in industrial space demand over the past 12 months, but new supply has largely outpaced absorption in 2022, a trend that is expected to repeat for the first half of 2023. The average asking industrial rent is $10.71 per square foot on a triple-net basis, up nearly 30 percent since the beginning of the pandemic and up more than 35 percent over the past five years.

Supply pressure has eased over the past four quarters, and there are 5.2 million square feet of construction underway.

Tampa Industrial Market Snapshot

• Properties delivered: 40
• SF under construction: 5, 261,450
• Average Vacancy rate: 4.1%
• Average Rent Growth: 13.9%
• Sales Volume: $1.5B

Sales

Investors continue to seek well-positioned distribution properties in Tampa. Over the last year, activity has been brisk with $1.5 billion in total transaction volume and an average cap rate of 6.5 percent. Pricing continues to incrementally rise due to feverish demand, and while it is increasingly difficult to find deals in strong infill areas, investors continue to scour the market for opportunities. The most significant property trade to date in 2022 involved the trade of a 493,200 square foot bulk distribution facility in the Gibsonton submarket to Washington, DC-based AFL-CIO Building Investment Trust for $103 million.

The final quarter of 2022 set a record with over $600 million trading hands following three successive quarters of accelerating investment activity.