ORLANDO–Tampa's office market starting hitting on all cylinders in 2015. The Westshore submarket, in particular, saw dramatic traction, prompting some to wonder if the Tampa office market will see new construction soon.
GlobeSt.com caught up with Anne-Marie Ayers, first vice president of CBRE Tampa, to get her comparisons, contracts and predictions for Tampa's office market in 2016 in part one of this exclusive interview series. Stay tuned for part two, in which she will discuss new trends that could emerge in the Tampa office market.
GlobeSt.com: Compared to expectations, how did Tampa's office market perform in 2015?
Ayers: The Tampa MSA outperformed all annual projections, including net absorption and rent growth. Overall office absorption was over 1.7 million rental square feet while the forecast had set a target range of 1.2 to 1.3 million. Tampa's rent rate growth came in at 6.1% in 2015, which smashed the 5% growth forecast that analysts had considered to be an aggressive target.
GlobeSt.com: What are your predictions for Tampa in 2016?
Ayers: Tampa will continue to exceed absorption and rent growth expectations in 2016. Class A office vacancy should reach 7% by year end and rents will hit a high-water mark of $34 per square foot for the first time ever.
Meanwhile, class B and C office vacancy rates will approach 10%. Several new office developments are likely to break ground this year.
Tampa's robust investment sales activity is expected to last through 2016 with most class A office buildings trading during the year. Investors will look to buy large office portfolios here in the Tampa MSA and across the United States. Strong office sales activity should help drive rents higher as well.
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