Q1 2025 Tampa Industrial Market Report

Highlights

• Leasing Momentum: Tampa’s industrial leasing volume is 15-20% above pre-pandemic norms, led by strong demand in the sub-50,000SF segment.
• Small-Bay Strength: Over 450 leases under 50,000SF were signed in 2024, (up from 340 in 2022) underscoring the resilience of the market’s core tenant base.
• Modern Buildings Win: Six of the nine 100,000SF+ leases signed in 2024 were in buildings less than 5 years old, reflecting tenant preference for high-spec, modern space.
• Vacancy Still Competitive: Despite recent increases the vacancy rate sits at 6.5%, well below the national average of 7.4%.
• Rent Growth Persists: Asking rents are up 4.7% YOY, and landlords are maintaining favorable deal terms with strong tenant interest in newer product.

Pasco County

Pasco County has remained stable over the past few quarters, with vacancy holding steady at 8.3%. While this is one of the higher vacancy rates in the Tampa region and above the market average of 6.5%, it reflects a market undergoing recalibration after years of rapid expansion.

New construction activity has slowed to its lowest level in three years, with just 1.0M SF in the active pipeline. However, renewed development is on the horizon—Columnar is expected to break ground on 75 Logistics at Double Branch, a project that includes 5.5M SF of industrial space, including 2M SF of build-to-suit opportunities.

Target delivered and occupied a 1.4M SF distribution center in Q3 2024, which bolstered the trailing 12-month absorption. Without this major move-in, absorption would likely have turned negative.

On the rent side, growth has moderated but remains positive. Asking rents have increased 4.5% YOY to $12.50/SF. This rate of growth is approaching the pre-pandemic norm and offers a more sustainable trajectory for landlords and tenants alike.

Hillsborough County

Leasing momentum has moderated from its post-pandemic highs. The East Side Submarket, historically a magnet for large-scale users, saw net absorption total 700,000 SF over the past year—though without Coca-Cola’s 730,000-SF move-in, absorption would likely have been negative. E Hillsborough/Plant City remains strong, absorbing 1.9 million SF, nearly 60% of Tampa’s total, driven by a still-robust construction pipeline.

After years of double-digit growth, rent increases have decelerated but remain historically high in Hillsborough County. The East Side Submarket, long a value leader, has seen rents surge 64.3% over the past five years to $12.80/SF triple net, matching traditionally high-rent areas like the Westshore/Airport ($13.90/SF) and NW Hillsborough ($16.20/SF). Flex and specialized spaces continue to command premiums, with top rents reaching above $20/SF in segments like Eastern Outlying and NW Hillsborough.

County-wide, deliveries have outpaced absorption in several submarkets, prompting a reduction in speculative builds. The East Side saw 1.8 million SF delivered in the past year but has only 200,000 SF under construction today, reflecting both land constraints and market recalibration. Similarly, SW Hillsborough, despite historically low activity, currently has 400,000 SF in the pipeline—its highest level in a decade.

Pinellas County

The leasing market has shown signs of fatigue over the past year, with elevated vacancies and weak absorption. North Pinellas recorded -44,000 SF of absorption over the trailing 12 months, while South Pinellas posted a steeper -480,000 SF, pushing its vacancy rate to a nine-year high of 6.0%. These rising vacancy levels are driven by a multitude of small tenant move-outs, rather than any single large exit.

Only two new leases exceeding 100,000 SF occured in South Pinellas and limited absorption from deals in the 50,000–100,000 SF range. Just four of the 18 leases signed for spaces over 20,000 SF involved new buildings, highlighting an aging inventory and tenant hesitance to relocate.

Asking rents have held relatively firm, though rent growth has slowed from2021–2022 levels. North Pinellas posted a YOY rent increase of 3.5%, bringing average asking rates to $14.10/SF NNN. South Pinellas—historically among Tampa’s priciest submarkets—recorded a slightly higher growth rate of 4.3%, with asking rents averaging $13.70/SF. While landlords have dialed back aggressive rent hikes, persistent land constraints and redevelopment costs may place upward pressure on rents in future years, especially for newer product.

Construction activity remains minimal due to the county’s extreme land scarcity, a long-standing barrier to large-scale industrial expansion. Over the past year, 360,000 SF of space delivered, and 410,000 SF is currently under construction, a modest pipeline compared to Hillsborough County.