Wider evidence of softening market creates additional opportunities for occupiers
Throughout the ongoing pandemic, the Tampa Bay area has fared better in many ways when compared to other major markets. However, it is not immune from challenges, and the softening of office market fundamentals was more evident at the end of 2020. Tampa Bay saw a continued slowdown in leasing velocity in Q4. Correspondingly, overall availability continued an upward trend, with a quarterly increase of 110 basis points (bps) to 17.8%. The Westshore Class A submarket saw the largest rise in availability, increasing by 260 bps quarter over quarter. In part, this was due to the long-anticipated delivery of new Class A space. The new inventory, coupled with more sublease space hitting the market, has put pressure on landlords to lower asking rates. Downtown Tampa Class A rates saw a quarterly drop of almost 6.0% from $37.25 per square foot (psf) to $35.20 psf, while Westshore Class A rates dropped just slightly from $35.44 psf to $35.23 psf.