What to watch in Tampa Bay, Florida’s industrial market in 2026
Tampa Bay’s industrial market enters 2026 on a distinctly different footing than it did last year.
The vacancy rate has climbed to 7.3%, the highest in a decade, and annual absorption hit a 10-year low in 2025. Rent growth slowed to just 2.9%, the weakest annual rate since 2015. Despite these headwinds, Tampa Bay continues to outperform many U.S. markets, particularly in the small-bay segment. Three major themes are likely to shape the market this year: a changing construction pipeline, sustained demand for small-bay properties and flight to quality.
Construction pipeline shifts
Development activity has cooled significantly. Just 2.4 million square feet is under construction, the lowest level in five years. The current pipeline compares to the 7.4 million square feet that were underway at the peak in 2022. The average building size of assets under construction has shrunk to 105,000 square feet from 160,000 square feet in 2022, reflecting both land constraints and evolving tenant needs.
As a result of the construction slowdown, completions are forecast to slow to 1.5 million square feet in 2026, down from 3 million in 2025. The largest speculative project set to be completed this year is a 202,540-square-foot building at Crossroads Logistics Park, a stark contrast to last year’s 535,000-square-foot Count Line Crossing, which remains vacant.
Small-bay demand remains strong
Small-bay properties, defined as those ranging from 10,000 to 100,000 square feet, continue to outperform. Tampa Bay ranks second nationally in small-bay performance, based on leasing, vacancy, inventory growth and rent growth. Leasing volume, within these buildings, accounted for 45% of 2025’s leasing activity, up from 33% in 2022.
“Small bay continues to be a very strong segment for the Tampa Bay industrial market. It’s where we’re seeing the most leasing activity and also the most rent growth. Small bay has always been the bread and butter of the market, and more developers are leaning into that”, says Peter Cecora, executive managing director of industrial services with JLL.
Asking rents for small-bay properties average $13.20 per square foot, with some exceeding $15 per square foot, and vacancy remains low at 4.5%. Most vacancies are concentrated in older buildings, while newer, small-bay properties are experiencing positive absorption. This segment’s resilience underscores its role as the backbone of Tampa Bay’s industrial market.
Flight to quality accelerates
Tenant preference for modern facilities is reshaping absorption trends. Properties built before 2016 recorded 1.5 million square feet of negative absorption in 2025, while newer facilities constructed in the past decade posted two million square feet of positive absorption. Features such as higher clear heights, trailer parking and built-out office space are driving demand for newer product. Among leases over 100,000 square feet signed last year, nine out of 10 were in buildings less than a decade old.
“We’re speaking to several tenants that are in older vintage buildings that are now looking for the efficiencies that new construction brings. The gap in rent between new construction and Class B or C product is narrower than you would think, especially when you factor in higher clear heights, better loading, and other amenities that the modern industrial tenant is looking for,” adds Cecora.
The big picture
While headline metrics, such as vacancy and rent growth, suggest a cooling market, the underlying story is more nuanced. A leaner construction pipeline should help balance supply; small-bay demand remains a bright spot, and flight to quality continues to shape leasing decisions.
(CoStar Analytics | By Michelle Rumore)
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