Tampa Bay, Florida’s industrial market is struggling to keep demand up with supply for the second quarter.
Net absorption in three months through June was just 600,000 square feet, down 75 percent year-over-year, a report from Savills Research found.
Vacancies rose by 210 basis points compared with the same period last year to 7.1 percent. Asking rents were down to $10.35 versus $10.55 in the second quarter of 2023.
Overall, Tampa Bay has 8.2 million square feet under construction. Most of it is coming from the I-4 highway in the Eastern part of the submarket.
“Demand has not kept pace with new deliveries hitting the market,” Savills said.
Interestingly, Florida and other sunbelt states have generally seen big demand across CRE thanks to surging population growth. While Miami vacancies have shot up to five percent from three percent at the end of 2023, industrial demand seems to be strong, according to a CBRE report. Positive absorption in the market reached 531,000 square feet and over a million for the entire first half of 2024.
Jason Isaacson, founder of IP Capital Partners, which is currently focusing on South Florida and Tampa Bay, recently told GlobeSt that he was seeing a supply issue rather than demand. But the latest Savills report shows that those elements are both equal issues in Tampa right now, with net absorption tumbling.
The top deals in Tampa Bay’s industrial market went to Sonoco, and Republic National Distributing Company, which took up 252,580 and 242,932 square feet of space, respectively. Polyglass USA, SafeliteAuto Glass, and Supplement Manufacturing Partner ranked third, fourth, and fifth.
The British-based real estate firm did not provide an outlook for the market, as uncertainties with supply meeting the demand remain.