TAMPA BAY INDUSTRIAL REAL ESTATE MARKET TRENDS AND HIGHLIGHTS
The Tampa Bay industrial real market, including the Tampa-St. Petersburg and Lakeland-Winter Haven areas, are some of the fastest-growing metros in the country. There have never been more people moving to the eastern and central parts of Florida as there are today in 2022. With this high growth, the need for industrial space is dire. Ecommerce trends have truly reshaped the way goods are moved around the country, and the composition of real estate near major city centers has changed with it. Throughout 2022, we expect industrial asset classes to continue to perform at a very high level. Investors who have industrial assets around these areas in their portfolios will likely enjoy very healthy long-term returns. Going forward, our industrial specialists will be watching the following trends:
DEMAND OUTPACING SUPPLY
To put it simply, industrial real estate throughout the Tampa Bay and Lakeland areas is currently very under-supplied. The lack of space paired with high costs of construction have resulted in a landlord’s market where rents are continuing to rise. This means tenants may have to be more flexible and open to creative solutions when it comes to finding space that suits their needs.
BUILD-TO-SUIT PROJECTS HIGHLY COVETED
Cap rates are compressed for all industrial types, but some build-to-suits for national credit tenants are seeing extreme lows, trading at below 4%, depending on the credit. It will be interesting to see how increased interest rates impact these figures, but once these big national companies identify a location they want, it seems most investors/developers are willing to pay above-market rates to win the deal.
CREATIVE DEVELOPMENT SOLUTIONS
The limited inventory and high costs of construction are fueling investor interest in flex light distribution space. We are also seeing covered land plays for redevelopment in growing areas that have limited land opportunities.
RELIANCE ON RAIL
Rail is moving significantly more freight every year, and new technologies are empowering the supply chain to fully embrace the new precision railroading model. We expect many industrial users in Florida to consider how rail can help them be most cost effective and efficient with their distribution.
Read or download Franklin Street’s full Tampa Bay Industrial Real Estate Market Report below: