Tampa Industrial Market Report
Market Overview
Tampa’s industrial market is the second largest in Florida, with 212 million square feet located along central Florida’s I-4 corridor. It also boasts the strongest rate of demand in Florida, with the market recording 1.9 million square feet of net absorption over the past year. Both job and population growth have been the leading indicators of the market’s success. The population has increased by over 412,200 people in the last decade, amounting to 790 new residents per week. Businesses have taken notice of the growing demand in Tampa, and as such, there is a limited number of space available for industrial tenants. The market is one of the few markets in the country where the price per square foot has been increasing, and pricing is forecast to continue its uphill climb for the foreseeable future.
In the last 12 months, industrial asking rents reached a record high of $12.20/SF.
Market Performance
Despite 3.9 million square feet being delivered and 5.5 million square feet under construction, over 50% of the space consists of preleased build-to-suits, helping keep vacancy in check. Build-to-suit projects, such as Target and Coca-Cola’s distribution centers, make up a significant portion.
Asking rents in Tampa increased 9.2% year-over-year in Q1 2024, showing a slowdown from the peak of 16% in mid-2022. Despite the deceleration, rents are up nearly 70% over the past five years, and continued growth is anticipated at 6% through 2025. Speculative construction has slowed, constituting less than 40% of the active pipeline.
Investment activity in Tampa peaked in 2021 at nearly $1.8 billion but has since declined, recording $873 million in sales volume over the last 12 months. The decrease is attributed to a lack of institutional-level trades, with many transactions (95% in 2023) below $10 million. Despite declining investment volume, the sale price per square foot continues to rise, reaching $135 per square foot in Q1 2024, indicating sustained demand and confidence in the market.
Tampa By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 4.9%
- Rent Growth: 9.2%
- Deliveries SF: 3.9M
- Sales Volume: $895M
- Cap Rate: 6.8%
To read a previous Tampa, FL Industrial Market Report, click here.
