The State of the Commercial Property Market in Tampa, FL
What is the condition of Florida’s Tampa Bay area commercial property market? What’s ahead? What key factors should investors be watching?
The Tampa Bay area has become one of the hottest and fastest growing real estate markets in America. It has attracted major national developers and retailers, as well as startup investors. The rise of, and buzz around the Tampa Bay Lightning and other media has helped the draw, as well as having relative affordability compared to America’s other more famous metros.
Tampa has been ranked as one of the top two cities for first time home buyers by Zillow, and Collier reports a strong office market, retail trends, and even rising industrial rents in 2017. A massive office building deal with AAA, has even encouraged its developer to seek more spec building opportunities in the suburbs.
Ongoing job and population growth appears to support more building and investor returns on the variety of new Tampa commercial developments which have been popping up on the landscape.
The Tampa Property Market Outlook
There continues to be ongoing demand for multifamily units in Tampa, as 1,000 people a day continue to move to Florida. Major hedge funds and commercial real estate investment firms are in the process of both laying out new development plans for mixed use communities, as well as trading parcels which have become ripe for development.
Asking prices for retail and office properties in Tampa are already above the state average, but appear to be on an upward trajectory. Multifamily property asking prices in the city of Tampa appear to be significantly lower than the state average, but also appear to be on a downward curve since early 2016, according to Loopnet.
As other major cities like San Francisco peak in this cycle, investors should anticipate more of a rush to Tampa for growth and returns.
Factors to Watch
Factors to keep an eye on, and which could impact the local commercial property market include:
- The newly proposed Financial Choice Act
- New availability of former agricultural land which is ripe for rezoning
- Macro real estate cycles
- Generation Y and Z consumer and employment trends (offline versus online)
Tampa has been, and still is one of the hottest real estate markets in America. Overall, things could heat up more before any cooling happens. Another spring of growth and even larger injection of capital could be on the horizon as well. While there is strength across all sectors, investors should keep an eye on emerging trends in jobs and retail, and how they may impact demand and yields.