Chelsea Drinkard No Comments

Was 4th Quarter of 2018 the End of the Office Space Era?

Not the slightest. How is the Tampa Bay office market doing? Compared to Q4 of 2017, the overall vacancy rate for Hillsborough County office space has increased slightly to 11.9%. It should also be noted that overall new square footage under construction increased dramatically from 150,000 to 580,000, bringing over new 400,000 sq. ft. to the market. The average asking rent also increased from $24.88/sq.ft. to $26.07/sq. ft., with Westshore leading the way with the highest level of Class A asking rent noted in the history of Hillsborough County at $34.00/sq. ft.

Downtown Tampa and Westshore often teeter totter back and forth of for the top spot of highest rent in all submarkets with approx. 10% separating from the next submarket in the lineup.

Below is the average asking rent for Class A Full Service office space:

  • Westshore: $34.00/sq. ft.
  • Downtown Tampa: $32.50/sq. ft.
  • Northwest Tampa: $24.20/sq. ft.
  • Downtown St. Petersburg: $30.25/sq. ft.

As the year drew to an end, it should be noted that Class A space led the market with over 100,000 sq. ft. absorbed. Office space in the suburban market held the greatest ranking with almost 2.0 of the 2.4 million sq. ft. available leased. These statistics help us to see how the leasing aspect of the Tampa Bay market was robust and points to a healthy 2019 rate of leasing activity as well.

Forecast:

The market is estimated to continue the rent growth in the 2019 and starting 2020 level out and potentially increase as more available space comes is delivered to the market.

What does this mean for Tenants?

  • The market should continue to absorb positively in this next quarter.
  • With vacancies decreasing while the Tenant demand remains steady, Landlords have the upper hand to increase rents as we move into 2019.
  • Now is the time to have a Tenant Broker advocating on your behalf.The market is dynamic, availability of space is quickly shifting and having a Broker who has their finger on the market pulse and long standing relationships with Brokers will get you the best terms as possible.