Despite ongoing tariff uncertainty rippling through the economy, demand in Tampa Bay’s office sector remains robust and shows no signs of slowing down.
Leasing activity of 2.1 million square feet stood out in the first quarter, representing a surge of 79 percent, or 900,000 square feet year-over-year, according to a market report from Savills. Large deals led the strong flow from tenants in the financial and insurance sectors.
"Notable deals included commitments from global brands such as MetLife, Fisher Investments, JPMorgan Chase, and Geico," Savills wrote, as these brands secured 183,047 square feet, 142,881 square feet, 105,110 square feet, and 65,071 square feet in their leases, respectively.
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Seven of the largest 10 deals were either relocations or new locations.
The surge in leasing activity plunged the availability rate in the city by 160 basis points to 18.6 percent, the lowest level seen since the first quarter of 2021. Also, sublease space dropped by 200,000 square feet to 2.8 million square feet.
"Occupiers continue to focus on Class A product, shown by the 430 bps drop in the region's Class A availability to 20.3% from 24.6% a year ago," said Savills.
Asking rental rates saw solid growth, increasing by 3.8 percent to $30.15 per square foot. Tampa's CBD recorded the highest prices, at $40.65 per square foot, with South Pinellas posting the lowest at $22.84 per square foot.
Savills said that Tampa's office sector has benefited from the city's in-migration since the pandemic. In the past five years, the Tampa-St. Petersburg-Clearwater Metropolitan Statistical Area (MSA) has increased its population by seven percent to roughly 3.4 million residents.
Going forward, Savills expects Class A office assets in Tampa to continue to decline in availability and experience "upward pressure on asking rates across the region."
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