Q1 2021 Engage in Tampa Bay
Q1 2021 OFFICE MARKET tampa bay
MARKET DEMAND New leasing demand in the first quarter, including both Hillsborough and Pinellas counties, was over double the level from the fourth quarter of 2020, up 126% but down 68% compared to the level of activity in the first quarter of last year. While the strongest quarter for activity since the second quarter of 2020, the 567,000 sf in total leasing volume for the first three months was off by 31% from the five-year average for first quarter activity. Class A assets had the most leasing activity, accounting for 55% of all deals compared to 38% in Class B assets. Absorption trended downward in the first three months on additions to sublease space in suburban submarkets. Class A inventory/assets in the Tampa CBD recorded the largest amount of positive absorption during the quarter with 27,900 sf. Suburban submarkets accounted for -371,000 sf in negative absorption. MARKET PRICING Overall asking rents increased 2.8% YOY to $27.62 per square foot (psf) full service. For Class A assets, rents decreased marginally, falling by $0.22 YOY to $30.14 psf, the 4th quarter in a row where Tampa Bay rents were over $30.00 psf. Class A rents in the Tampa CBD rose by 5.8% in the last 12 months. For Class B, overall rental rates gained, up by 2.8% YOY to $24.41 psf.
474 TOTAL BUILDINGS
43.6 Million SF TOTAL INVENTORY
567,000 SF YTD LEASING ACTIVITY
MARKET SUPPLY Overall vacancy ended the first quarter at 14.6%, an increase of 200 bps when compared to the same period one year ago. Class A vacancy rose by 400 bps YOY to 14.7% with space in Class B falling by 80 bps to 15.2%. Several large blocks of vacant sublease space came to the market in the first quarter and was the main driver for the increase in Class A vacancy. Approximately 1.0 million square feet (msf) was under construction, all in Hillsborough County and with over 60% being built in suburban submarkets. Another 570,000 square feet (sf) delivered in 2020 in the County with sizable vacancies. In the Central Business District (CBD), the largest speculative project was Strategic Property Trust’s 1001 Water Street tower, with 375,000 sf. There was no new office inventory under construction in Pinellas County.
of office space leased in the past five years 13.7M SF over
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Cushman & Wakefield
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