by John Milsaps, Certified Office Specialist
As a commercial real estate broker specializing in medical and professional office properties in Tampa, Florida, I’m on the ground every day. Here’s what I’m seeing— a dynamic market landscape characterized by resilience, strategic growth, and evolving tenant preferences.
Here is an overview of the current trends shaping Tampa’s office real estate sector.
Leasing Activity and Vacancy Rates
Tampa’s office market has demonstrated notable resilience. In 2024, the city led Florida with approximately 6.6 million square feet leased, marking the strongest leasing activity since 2021.
According to CoStar, this robust demand contributed to over 100,000 square feet of positive absorption, maintaining the vacancy rate at a stable 9.5% over the past three years.
However, vacancy rates vary across submarkets. Westshore’s vacancy rate decreased to below 12%, a four-year low, reflecting its appeal to tenants seeking quality spaces. Meanwhile, a recent report by Cliggit shows that Northeast Tampa experienced an increase, with vacancy rates now exceeding 15%, underscoring the importance of location and amenities in tenant decisions.
Rental Rates and Market Dynamics
Despite fluctuations in vacancy rates, rental rates have shown consistent growth. As of Q4 2024, average full-service asking rents reached $32.08 per square foot, a 4.8% increase from Q4 2021.
This upward trend indicates sustained demand for quality office spaces.
The “flight-to-quality” trend is evident, with trophy office availability dropping by 22% year over year, as tenants prioritize top-tier spaces.
This shift emphasizes the need for landlords to enhance property offerings to attract and retain tenants.
Medical Office Market Insights
The medical office sector in Tampa remains robust, driven by a growing population and increasing healthcare needs.
In Southwest Florida, which includes Tampa, market rents average $26.68 per square foot, with a decade-long annual growth rate of 4%. The region boasts a substantial medical office inventory totaling 47.5 million square feet, with 376,000 square feet currently under construction, reflecting ongoing demand for healthcare services.
Investment Activity and Development
Investment activity in Tampa’s office market has experienced fluctuations. Despite this, strategic developments continue to shape Tampa’s skyline. Notably, Midtown East, a 430,000-square-foot trophy office building within the mixed-use Midtown project, is set to deliver in early 2025 and is already 78% leased (as of Q4 2024).
Additionally, the Gasworx development aims to connect Ybor City with downtown districts. The ambitious project features 50 acres of mixed-used development including 500,000 square feet of office space upon completion. The development recently secured a $182 million loan to kickoff construction.
Conclusion
Tampa’s office real estate market, including both professional and medical office properties, is exhibiting resilience and adaptability. Stable vacancy rates, rising rental rates, and targeted developments highlight the market’s strength. However, varying submarket performances and fluctuating investment activity suggest a need for strategic planning. As a broker, staying attuned to these trends ensures the ability to navigate opportunities and challenges effectively, providing clients with informed guidance in Tampa’s evolving commercial real estate landscape. Contact me for a confidential strategic consultation of your portfolio.
ABOUT THE AUTHOR | JOHN MILSAPS
JOHN MILSAPS | SENIOR ADVISOR Certified Office Specialist
John Milsaps has spent the past decade dedicated to his role as a commercial real estate professional who specializes in landlord representation and seller representation. Working as a senior advisor with SVN, he has consistently proven both his commitment to his clients, as well as his extensive knowledge of varying commercial real estate transactions.