Historical market overview: December 2023. This article summarizes the Tampa office market commentary originally published on December 12, 2023, which cited a CoStar report dated December 5, 2023. These figures have not been updated and do not describe current market conditions.

Tampa’s office market entered the end of 2023 with signs of stabilization, continued sublease competition, and tenants reconsidering how much space they needed.

For office and medical office owners, the practical issue was how those changes affected their own building, competing properties, and upcoming lease decisions.

Tampa Office Market Snapshot

The original article reported the following figures for the broader Tampa office market. The inventory figure should not be interpreted as Westshore’s inventory alone.

These are historical market-level figures. The original source report was not independently reverified during this article’s editorial update, and its building coverage and methodology should be checked before relying on the statistics.

Sublease Space Remained a Competitive Factor

The original commentary described more than three million square feet of available sublease space, approximately 15% below the prior-year level. It also cited approximately 3.7 million square feet available during summer 2022, much of it in buildings classified as four- and five-star properties.

Leasing activity in Westshore and Northwest Tampa helped shape the discussion. However, the original article’s characterization of remaining sublease locations as less desirable was not supported by a property-level comparison.

For landlords, the useful question was whether nearby sublease space offered a credible alternative to their own listing. Rent, remaining lease term, improvements, location, and occupancy timing all mattered.

Tenants Reconsidered Size and Location

The December 2023 article described leasing activity as approaching its pre-pandemic pace, alongside a preference for smaller, more efficient offices in suitable locations.

It highlighted Johnson & Johnson’s reported 60% reduction in Tampa office space and Grow Financial’s reported 50,000-square-foot prelease at Gasworx as examples of companies making different workplace decisions.

Those examples should not be treated as proof that every company was reducing its footprint. Tenant requirements depended on staffing, work patterns, business operations, and the suitability of the space.

Rent Growth and Investment Activity

The original article reported asking-rent growth of 3.2% year over year and described that growth as stronger than Orlando’s. It also noted that rent growth for four- and five-star office properties had slowed from nearly 5% to approximately 3%.

Sales activity reportedly slowed during summer 2023, while pricing remained just below $200 per square foot. The article also cited an increase in capitalization rates to approximately 8.5%.

These averages do not establish an individual building’s value. A property’s income, occupancy, lease terms, condition, capital requirements, and financing environment affect the price a buyer may pay.

Employment and Population Provided Regional Context

The original commentary cited population growth of more than 412,000 over a ten-year period. It did not establish the geographic boundary or measurement dates, so that figure should not be interpreted as people moving into the city of Tampa alone.

It also noted Florida’s population growth between July 2021 and July 2022 and reported approximately 44,900 additional jobs in the Tampa area over the preceding year.

Education, health services, and business services were identified as areas of employment growth, while information and financial activities experienced losses. Those were historical observations rather than a description of today’s employment market.

What Owners Could Take From the Report

The December 2023 outlook suggested that market stabilization could occur alongside substantial competition and changing tenant requirements.

My recommendation for owners is to compare their property with the space competing for the same tenants. Review asking rents, concessions, improvement costs, lease expirations, and the building’s condition before making a leasing or sale decision.

If you own an office or medical office property in Hillsborough, Pinellas, or Pasco County, explore landlord representation or seller representation, or contact John Milsaps to discuss your property and current market information.

Original source cited: CoStar, “Tampa – FL Office Market,” December 5, 2023. Figures above preserve the original article’s reporting and are not a newly verified market dataset.