New Development, Rent Growth, and Strong Demand in Sub-50,000-Square-Foot Spaces Poised To Shape the Market

Tampa Bay’s Competitive Edge
The Tampa Bay industrial market kicks off 2025 in a stronger position than many other major industrial regions across the U.S. While a wave of new construction has nudged vacancy rates upward, those increases remain modest compared to neighboring Florida markets. Tampa Bay’s industrial vacancy rate currently sits at about 5.7%, a 100-basis-point bump from last year. In contrast, Orlando’s vacancy rate has jumped 250 basis points year over year to 7.0%.

Despite a cooling from the record-setting leasing activity of 2021 and 2022, demand remains notably robust. Around 2.3 million square feet of industrial space were absorbed in Tampa Bay in 2024—on par with the region’s pre-pandemic annual averages. This consistent interest keeps developers optimistic and looking for creative ways to secure prime land, a trend that bodes well for future growth.

Transforming Office to Industrial
“As land becomes scarce, some developers are turning to underperforming office sites for industrial conversions,” explains Peter Cecora, senior managing director with JLL. One such example is Richland Capital Holdings Investments’ purchase of 6700 Lakeview Drive in April 2023. The existing 187,000-square-foot office structure was demolished to pave the way for two industrial buildings totaling 300,000 square feet—part of a shift toward smaller, more flexible industrial footprints.

Many projects slated to break ground are sized between 100,000 and 200,000 square feet, a strategic move reflecting current tenant needs. “I have seen several developers reconfigure their plans to include 200,000-square-foot and smaller rear-load buildings,” Cecora notes. “The under-50,000-square-foot market is especially hot, and developers are adapting to capture that demand.”

Sub-50,000-Square-Foot Market Takes Center Stage
Tampa Bay has always benefited from a wide spectrum of industrial users, and those needing less than 50,000 square feet have been a foundational driver. In 2024, more than 450 new leases were signed in that size category—up significantly from 340 in 2022, when Tampa Bay’s leasing velocity hit a record high of 14.6 million square feet.

Brokers International has witnessed this surge firsthand, assisting numerous clients in the sub-50,000-square-foot market with site selection and lease negotiations. “Tenant demand in this segment shows no sign of slowing, and it’s driving renewed focus on flexible footprints,” says one of Brokers International’s senior advisors.

East Tampa’s Rent Surge
East Tampa is a prime example of how new development can drive rental growth. Historically, this submarket trailed behind the airport area and Pinellas County by $2 to $3 per square foot in asking rents. Yet, as availability tightens and new product delivers, that gap has significantly narrowed.

“Landlords in east Tampa are achieving leases in the low teens per square foot, a substantial increase that reduces the long-standing rent differential with other core Tampa submarkets,” adds Cecora. Over the last five years, rents in east Tampa have climbed nearly 70%, now averaging $12.70 per square foot on a triple-net basis.

This surge reflects rising land costs: Sites in Tampa’s core are trading between $500,000 and $1 million per acre. Developers must secure rents in the low-to-mid teens to justify these elevated land prices—reinforcing the bullish outlook for continued construction and redevelopment.

Steady Rent Growth Ahead
Despite moderating from its 2022 peak of 15%, Tampa Bay’s annual rent growth remains strong at about 5%, well above the national average of 2.2%. While the pace may be more measured going forward, most market watchers anticipate that Tampa Bay will continue outperforming the broader U.S. industrial sector through 2025.

Brokers International believes this bodes well for both occupiers and investors. “Healthy rent growth combined with historically low vacancy levels create a stable environment for our clients, whether they’re looking to lease, buy, or sell,” says the managing broker at Brokers International.

Looking Ahead
Tampa Bay’s industrial story in 2025 centers on opportunity:

• Robust Demand: Even with new supply, the region’s industrial users continue to absorb space at a pace that matches or exceeds historical norms.
• Smaller-Footprint Flexibility: Developers are aligning their construction plans with the soaring demand for sub-50,000-square-foot configurations.
• Rising Rents in Emerging Submarkets: East Tampa’s rent growth exemplifies how quickly secondary submarkets can evolve to rival established industrial hubs.

At Brokers International, our team stands ready to guide you through Tampa Bay’s dynamic industrial landscape—whether you’re exploring a new build-to-suit opportunity, upgrading to a more efficient footprint, or seeking prime investment opportunities in 2025.

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