In Tampa Bay, 'the confidence in the industrial market is valid'
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Jan 15, 2021

Tampa Bay’s industrial real estate market was hot long before the novel coronavirus pandemic arrived on U.S. shores — and experts see plenty of runway for the blistering growth to continue.

Covid-19 did temporarily pause deal flow for smaller warehouse tenants in 2020, said Chris Owen, director of Florida research for Cushman & Wakefield Inc. But while big-box users like Amazon.com and Nestle made headlines, smaller tenants resumed signing leases and taking occupancy in the latter half of the year.

Most of the new construction was in Plant City, according to Cushman’s data. Plant City saw 1.8 million square feet delivered; East Tampa saw another 735,000 square feet. The last two years saw 7 million square feet of new warehouse space delivered throughout Tampa Bay — the most new inventory ever delivered in a 24-month period here.

Warehouse leases — large and small — are major job creators and economic drivers for the Tampa Bay region, which has seen unprecedented growth in the industrial real estate market for the last six years. The pandemic has caused a surge in online shopping, driving even more demand for warehouse space here. Beyond creating jobs, big warehouses also generate significant tax revenue for municipalities, including some of the area’s more rural counties.

Within the year’s top 10 largest warehouse leases, the average size increased 87 percent in 2020 compared to 2019. Within the top 10 deals of 2019, the average size was 242,701. In 2020, the average size of the top 10 deals was 453,475.

Of course, Amazon was gobbling up speed at a breakneck pace in 2020: Two of the year’s largest industrial leases were Amazon, according to Cushman data.

“The confidence in the industrial market is valid,” Owen said, “and it should continue. There’s nothing on the horizon that indicates any concern. Tampa is in a great location that many national retailers are looking at as a distribution point for the state.”

While the amount of vacant space increased, Cushman’s data says the increase is due to new construction coming online — not companies folding and leaving their space behind.

Tampa Bay’s overall asking rental rates for industrial real estate rose 6.4 percent year-over-year to $6.94 per square foot for triple net leases (a lease in which the tenant agrees to pay real estate taxes, building insurance and maintenance). The rising rents in Hillsborough County and Lakeland were driven by availabilities from new construction — those rates were up 4.6 percent and 2.9 percent respectively year-over-year.