Booming Tampa Industrial Market at 6.3% Vacancy

Colliers Arnold shows total vacancy among 3,811 monitored buildings totaling 161 million sf is at 6.3%, down a full percentage point from mid-year 2004. CBRE puts the second-quarter direct vacancy rate at 6.6%, a four-year low.

"Available industrial space in the Tampa market has become a scarce commodity in 2005," Tampa CBRE research director Randy Smith tells GlobeSt.com. "The active acquisition of industrial facilities by users has been responsible for much of the positive momentum in the market."

The researcher cites Gulf Coast Spa Manufacturers Inc.'s $4.67-million May purchase of a 162,000-sf building at Hanna Distribution Center in east Tampa. The company plans to move its manufacturing facility to Tampa from Ocala in Marion County and hire about 150 employees by the end of this year. "The company's total investment in the Tampa facility will be about $10 million and the new plant will triple the company's production."

Industrial demand in Tampa created 1.1 million sf of net absorption in the first half, "a lofty standard for the balance of this year," Smith says. "A scarcity on [completed] new construction has investment-grade users scrambling to anticipate future needs, and developers expediting new projects."

Smith tells GlobeSt.com "real estate investment trusts, who have been the traditional developers of large-scale projects in Tampa, have recently strengthened their land positions for future industrial expansion."

As demand for industrial space heats up, rents are gradually increasing in the three major leasing categories, according to the Colliers Arnold data. Flex and service center space is at $8.89 per sf, up from $8.25 in first quarter and $8.19 in fourth quarter 2004. Warehouse and distribution rents average $4.57 per sf, up from $4.44 per sf in first quarter and $4.41 in fourth quarter 2004. Manufacturing space averages $4.20 per sf, up from $4.18 in first quarter but down from $4.22 in fourth quarter 2004.