TAMPA, FL—In what some are calling the most significant industrial deal in the Tampa Bay area in the last 15 years, Highland Packaging Solutions is moving its operations from Mulberry to Plant City later this year. The food container and label manufacturer inked a 240,000-square-foot industrial lease on Gordon Food Service Drive.

Rick Narkiewicz, a first vice president at CBRE, represented Highland Packaging Solutions. Highland is filling a hole in the local market, as grocer Albertsons exits the property it has been using as a distribution center in the wake of store closings. Terms of the lease were not disclosed.

Narkiewicz GlobeSt.com this time last year there were eight class A or B industrial spaces larger than 150,000 square feet available in east Tampa. Now there are just three.
 
“This drastic reduction in supply should take some pressure off landlords, quite possibly leading to rent growth and fewer concessions,” Narkiewicz says. “Net absorption year to date is 400,000 square feet. Compare this to two years ago when we would have one million square feet of negative absorption in a single quarter.”

All of this translates to an improving Tampa industrial market. Narkiewicz says he is seeing more legitimate tenants in the market even as lease and sale comps inch higher and more deals actually close. Still, it’s not a complete recovery—prices are still much lower than five years ago and completing a deal is still challenging.
 
“The Tampa industrial market has come off the bottom,” Narkiewicz says. “There is concrete evidence to support this trend, but we still have some work to do.”

Narkiewicz’s message to his tenant and owner-user clients: move forward with expansion plans. From his perspective, there are now multiple examples of owner-user buyers that have been trying very hard over an extended period of time to “steal” a building and have come up empty handed.  

“Tenants and owner-users can still get a great deal,” Narkiewicz says. “ But there are far fewer opportunities and the blue-light special on functional industrial space is about come to an end.”