Why Tampa Bay

Contents

OFFICE Q4 2024 TAMPA BAY

MARKET FUNDAMENTALS

ECONOMY Tampa Bay’s unemployment rate stood at 3.6% in Q4 2024, up 40 basis points (bps) year-over-year (YOY) yet remaining below the national average of 4.2%. Over the past year, nonfarm employment in the region grew by 10,700 jobs, representing a modest 0.7% increase. While the pace of job growth has slowed, Tampa’s economy remains robust, as the Bureau of Economic Analysis identified the region as the seventh fastest-growing economy among large U.S. metros. This growth has been driven by significant expansions in the finance, insurance, and real estate sectors, alongside notable gains in the healthcare industry. These key sectors continue to support Tampa Bay’s economic resilience and attract both businesses and talent to the region. SUPPLY Overall vacancy ended the year at 20.0%, a decrease of 120 bps YOY and the lowest level recorded since Q2 2022. This decline was primarily driven by occupancy gains in Hillsborough County, where vacancy fell 190 bps YOY to 20.7%, while Pinellas County recorded a 90-bp YOY increase, reaching 17.9%. A significant reduction in vacant sublease space contributed to the overall drop, with 1.5 million square feet (msf) vacant at the end of Q4, down 9.4% YOY. While premium space remained largely leased, tenants continued to favor Class A properties, resulting in a 240-bp YOY decline in vacancy to 19.1%, marking the lowest Class A rate since Q4 2021. In contrast, Class B assets had a

20.0% Vacancy Rate 424K YTD Net Absorption, SF $30.67 Asking Rent, PSF (Overall, All Property Classes)

YOY Chg

Outlook

SPACE DEMAND / DELIVERIES

1,500

0 500 1,000

ECONOMIC INDICATORS

-500

-1,000 Thousands

YOY Chg

SELECT A TOPIC TO NAVIGATE SECTIONS

1.6M

Outlook

-1,500

Related Insights Cushman & Wakefield Research reports analyze economic and commercial real estate activity including supply, demand and pricing trends at the statewide, market and submarket levels. 1 Tampa Employment 3.6% Tampa Unemployment Rate 4.2% U.S. Unemployment Rate Source:BLS modest increase in vacancy to 21.4%, driven by notable rises in smaller, tertiary submarkets. Vacancy rates may experience a slight uptick in early 2025 due to the anticipated delivery of Midtown East, which has 86,000 square feet (sf) still available for lease. Tampa Bay recorded positive year-end absorption for the first time since 2018, with 424,000 sf, the highest annual figure in seven years. Hillsborough County led the way with 565,000 sf of occupancy gains, while Pinellas County ended the year with -141,000 sf of net absorption. A key driver of this positive momentum in Q4 was Masonite’s move into its 128,000-sf national headquarters at West End Place in the Ybor City submarket, contributing to the largest YOY decline in vacancy, down 33.3% to 5.5%. Other significant Q4 occupancies included Alvarez & Marsal, which took 45,000 sf at LakePointe Two, and Fisher, which expanded into 31,000 sf at LakePointe One, both located in the Westshore submarket.

2020

2021

Net Absorption, SF Construction Completions, SF

2022

2023

2024

OVERALL VACANCY & ASKING RENT

$32

$30

$28

$26

$24

22%

$22

19%

$20

2020

16%

2021

2022

13%

Asking Rent, $ PSF

2023

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2024

10%

Vacancy Rate

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