Market Spotlight: Tampa Bay Industrial

            The Tampa-area industrial market has been among the most active along the Gulf Coast for the past five years, driven largely by population influx, changes in distribution protocols and the rise of online shopping.

            Although overshadowed by Lakeland and other area in Polk County along the Interstate 4 Corridor because of its centralized location, Tampa’s inventory of logistics properties has grown steadily thanks to so-called “last-mile distribution” of goods directly to consumers.

            While the submarket’s industrial submarket -- which includes Tampa, St. Petersburg, Brandon and Plant City -- could suffer over the balance of 2020 as the full impact of the coronavirus becomes known, the sector also could benefit from heightened consumer demand and deliveries.

            By almost every measure, though, through early May of this year the industrial market throughout Tampa Bay was posting record or near-record performances. Sales volume, rent growth, vacancy and deliveries all generated significant growth above historical averages, according to figures compiled by commercial real estate research firm CoStar Group.

            197,659,126

Total amount of space, as measured in square feet, contained in the Tampa Bay industrial market as of April 30.

            5.1%

Vacancy rate for the Tampa Bay industrial market, comprising logistics and distribution buildings, “flex” combinations of office and warehouse space, and so-called specialized industrial projects containing manufacturing and similar operations. At 5.1%, the vacancy is only 100 basis points above its record low. Historically, the vacancy rate has averaged 6.8%.

            $7.81

Overall average rental rate, on a per square foot basis, for all industrial space in the Tampa Bay area through the end of April. The cost of space ranges from $7.19 per square foot for bulk distribution and logistics space to just over $11 per square foot for specialized and manufacturing industrial buildings.

            3,225,000

Amount of new industrial space, as measured in square feet, under construction in the Tampa Bay area at the end of April. Of the total, more than 95% of the space under construction is expected to be used for logistics and distribution purposes.

            6,000,000

Amount of new industrial space, as measured in square feet, constructed in the Tampa Bay area since the first quarter of 2018.

            $916,000,000

Total value of industrial sales transactions in the 12-month period ending the first week of May. Historically, the average sales volume in a 12-month period is about $381 million.

            3,000,000

Amount of new industrial space, as measured in square feet, delivered to the Tampa Bay market over the past 12 months. Historically, the 12-month average is 1.88 million square feet.

            2,500,000

Amount of industrial space in the Tampa Bay market absorbed, or removed from available inventory through leasing, over the past 12 months.

            4.7%

Percentage of rental rate growth for Tampa Bay industrial space over the previous 12 months. Historically, industrial rental rate growth on an annual basis hovers around 2.1%.

            Source: CoStar Group