Tampa Bay, Florida’s small-bay industrial market reclaims leasing dominance
Leasing activity shifts back to smaller buildings as demand for large buildings slows
After several years of headline-grabbing mega leases, Tampa Bay’s industrial market is returning to its roots. Small-bay buildings, defined as 50,000 square feet or smaller, have accounted for 75% of direct industrial leases signed year to date, up from an average of 68% between 2020 and 2024.
Small-bay buildings have long been the backbone of Tampa Bay’s industrial leasing market. However, between 2021 and 2023, larger leases, particularly those over 100,000 square feet, dominated the headlines.
The Tampa Bay region landed several one-million-square-foot-plus build-to-suits and a record number of leases over 100,000 square feet. That momentum has slowed. The share of leases signed in buildings over 150,000 square feet has dropped to just 7% year to date, down from a peak of 10% in 2022.
Much of the small-bay leasing activity is concentrated near Tampa International Airport and in southern Pinellas County. These two industrial areas account for just over 40% of direct leases signed in small-bay buildings year to date. On a square footage basis, one million square feet of the 2.2 million square feet leased in small-bay buildings this year has occurred in these two areas. Current levels are slightly below the pre-pandemic average of 50% of small-bay building leasing activity occurring near Tampa International Airport and southern Pinellas County.
Demand for small-bay space has kept vacancies lower in these buildings than in the overall market. While vacancy in small-bay buildings is up 60 basis points year over year, the subset’s vacancy rate currently sits at 3.4%. In contrast, buildings larger than 300,000 square feet have a vacancy rate of 11%.
While developers are willing to demise larger buildings to accommodate small-bay-sized tenants, there are currently no buildings under construction in Tampa Bay under 50,000 square feet. With overall construction slowing, small-bay availabilities are expected to remain scarce as demand remains robust.
(CoStar Analytics | By Michelle Rumore)
If you have questions or would like to read the related article, please contact us via email and we will send you the link.