Economic uncertainty isn't going away — yet retail tenants are rushing to occupy space in Tampa. In the third quarter, leasing activity was almost 580,000 square feet — the highest the market has recorded since 2021, according to a report from Colliers.
International Farmer's Market snagged Tampa's top retail lease in the third quarter, securing 43,200 square feet of space in Mid-Pinellas. Advance Auto Parts and Michaels ranked second and third with 32,573 square feet and 30,892 square feet in their respective signings.
"This robust uptake shows a distinct market focus on major retail deals, often encompassing the purchase or extended leasing of anchor or shopping center properties," Colliers said.
Also, rental rates showed strong gains, going from $27.28 per square foot in the third quarter of 2024 to $29.47 per square foot.
That said, the market isn't without its flaws. Vacancy shot up by 140 basis points year-over-year to 5.7 percent. Lifestyle centers experienced the most turbulence, with the rate surging to 19.1 percent. This came as a result of "changing consumer habits," as lower-income individuals cut back on discretionary items, Colliers said. As a result, community centers, as well as strip and neighborhood centers, are averaging historically low vacancy, according to the CRE firm.
Also, net absorption remained negative at -154,246 square feet, though that's down from the -204,334 posted in the 12 months prior.
Moreover, supply is starting to pour into Tampa's retail sector again. More than 19,000 square feet was delivered in the third quarter, with nothing hitting the market both in the year prior and in the second quarter. Plus, 49,000 square feet is underway.
While economic headwinds remain, Colliers thinks market conditions for retail will remain healthy.
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