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Q4 2021 | Tampa Bay Office Market Report

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After eight years of positive absorption

The Tampa Bay office market recorded the second year of negative absorption with 850K sq. ft. of space added back to the market year-to-date, but with the increased leasing activity during 2021, those spaces will quickly fill throughout the coming year. With new space available in the market, many local companies took the opportunity to upgrade to higher-class buildings in the market. The Economic Development Board of Tampa (EDC) reported an uptick in new-to-market tenants coming from outside of the Tampa Bay area notably from Chicago, Boston and San Francisco. For instance, Rapid7, a cybersecurity analytics company from Boston, moved into co-working space in the Westshore submarket. In addition, Shufflrr, a software company, will relocate from New York to the metro area, and earlier this year, Signode, a distributor, announced plans to move their headquarters from Chicago to the
metro area. The EDC also noted interest from overseas companies like Germany, the UK and Canada.

Tenants that were previously priced out of core buildings and submarkets revisited their options due to the increased available sublease space, which topped a 10-years high of 2.7M sq. ft. There was a 75% increase of available subleases from 2019 to the current quarter, which pushed the overall vacancy rate to 13.4%, increasing 320 basis points (bps) at yearend. In contrast, direct vacancy, which does not include sublease space, started to trickle down quarter-over-quarter, decreasing 20 bps to 11.2% as tenants looking to move quickly took advantage of immediately available speculative suites. As companies re-evaluate their space needs, either by flight-to-quality, right-sizing or expansion, the Tampa Bay metro area is expected to experience a positive uptick in key fundamentals throughout 2022.


TBFLOffice21Q4

Q4 2021 | Tampa Bay Office Market Report

Download Report