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Q4 2021 | Tampa Bay Industrial Market Report

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Executive Summary

Driven by the area’s growing population, thriving economy and job growth, along with record low cap rates and an abundance of available capital, the Tampa Bay industrial market continued to be one of the top-performing commercial real estate asset classes in 2021. The investment market for industrial products remained as strong as ever, with institutional and private equity groups aggressively seeking all sizes and types of industrial assets. Industrial sales in 2021 nearly doubled sales trends in the previous two years. The Polk County submarket saw significant demand for large and bulk distribution warehouse space as tenants were ready to increase their physical footprint due to increasing online sales activity. Over 6.4M sq. ft. of industrial construction projects were underway in that submarket at the end of the year, which was the largest recorded amount, which usually average around 3.0M sq. ft. At yearend 2.0M sq. ft. of industrial space delivered making Polk County the most active in current construction projects. Industrial space demand continued to boost land costs, which in core areas increased rapidly over the past two years, ranging between $250K - $500K+ per acre. This cost passed on to tenants through increased rental rates, which increased 13.4% since Q4 2019. Because of these escalations in land and material costs, we expect rental rates to jump 4-8% in the near term to adjust to these higher costs and then continue to grow at 4-5% for the next several years until the market supply balances market demand. In addition, the increased transaction activity secured future development sites by locking in pricing for the underlying assets. With solid fundamentals in decreasing vacancy rates and positive absorption, demand across all industrial sectors will remain robust throughout 2022.


TBFLIndustrial21Q4

Q4 2021 | Tampa Bay Industrial Market Report

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