Tampa Office Market
Annual full-service asking rental rates reached a new high at $29.47/SF, reflecting a 5.8% increase year over year at the end of the third quarter of 2024. Vacancy rates remained relatively flat, reporting no change quarter over quarter and a 20 basis points increase year over year. The under-construction pipeline continues to remain muted in the market, with 518,929 SF under construction, accounting for just 0.8% of the market’s inventory. Leasing activity ended the quarter at 826,679 MSF, significantly lagging the 16-year third-quarter quarterly average of 1.4 MSF and reflecting a decrease of 53.1% year over year.
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The market reported 2.6 MSF of positive absorption in the third quarter of 2024, significantly bouncing back from the first quarterly negative occupancy reported since year-end 2013 in the previous quarter. Overall rental rates declined from the historical high in year-end 2023 by 9.4% to $7.64/SF but continued to remain elevated, despite reflecting negative yearly growth. Construction pipeline recorded 1.5 MSF of deliveries as of the end of the third quarter of 2024. Meanwhile, under construction declined to 6.9 MSF, reflecting a downward trend since reaching a recent high of 11.6 MSF in the third quarter of 2022. Following yearly supply outpacing demand, vacancy increased by 120 basis points year over year to 7.2%. Landlords leased a large amount of bulk space over the past years, improving the bulk-space segment that had been dragging down the market.
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