"This big-box distribution hub shows no signs of slowing down," notes Colliers Arnold research director Kimberly Kaiser. Two big land deals that will result in large build-to-suit projects are in the works, she says. "As the economy continues to improve, we expect pent-up demand will result in new leases and new product," she says.
Meanwhile, the overall Tampa Bay industrial market ended the first quarter with a net negative absorption of 382,902 sf, even though 90 deals totaling 1.2 million sf were completed in the six major submarkets. The 8.6% vacancy level has remained flat for 11 quarters, Kaiser says.
"Build-to-suit and speculative construction are beginning to pick back up, as well," she says. A total 245,105 sf of new product was under construction at the end of the first quarter and another 5.1 million sf is on the drawing board.
"Some developers will break ground within the next year, while others have taken a more cautious approach, waiting for 40% or more in pre-lease commitments before beginning to build," Kaiser says.
Rents have remained steady during the last four quarters but a change is expected, she says. "Tenants who want to make the best possible deal should act within the short term. In some submarkets, landlord concessions have already started to decrease."
Warehouse and distribution rents are averaging $4.47 per sf. Manufacturing is at $4.30 per sf; flex/service space is at an average $7.16 per sf.
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