Tampa Bay is not immune from the pandemic, according to a new report from Savills. The Florida market has actually performed well through the pandemic, but at the end of the year, the office market started to see some softening.

The report shows a decline in office leasing activity, down to .7 million square feet at the end of the fourth quarter compared to 1.2 million square feet at the end of 2019. As expected, this led to a rise in the vacancy rate, which grew to 17.8%, up from 15.4% in the fourth quarter, and a rise in the available inventory, which grew to 52 million square feet, up only nominally from the 51.1 million square feet available at the end of 2019. Rental rates also fell in response to the slowed leasing velocity, down to $26.41 per square foot from $26.46 at the end of the prior year.

Quarterly decreases were even more dramatic than annual losses. Office leasing was down 33% quarter-over-quarter. There were only a handful of notable leases to close in the last three months of the year, including Heritage Insurance, which announced a major regional relocation from Clearwater to Tampa with an 86,687-square-foot lease at 1401 N Westshore Boulevard in Westshore, and TriNet Group, which renewed its existing 75,205-square-foot lease at 9000 Town Center Parkway in the Lakewood Ranch area of Manatee County. Although this was a lease renewal, seven of 10 office lease transactions in the fourth quarter were relocations or new office leases.