Downtown Tampa’s office market continues to demonstrate resilience and growth, setting itself apart from national trends. As of the end of 2024, the overall vacancy rate in the Tampa Bay office market decreased to 20.0%, marking a 120 basis point decline year-over-year and reaching the lowest level since the second quarter of 2022.
Significant Developments and Transactions
- GasWorx in Ybor City: The GasWorx development, led by local entrepreneur Darryl Shaw and developer KETTLER, is set to break ground, aiming to connect Ybor City with downtown Tampa districts like the Channel District and Water Street. Upon completion, the project will introduce 5,000 new residences, 500,000 square feet of office space, and 140,000 square feet of retail space, further invigorating the area’s commercial landscape.
- 100 N Tampa Sale: In a landmark transaction, 100 N Tampa, one of the submarket’s premier office towers, sold for $151.3 million in the second quarter of 2024. The Brookdale Group acquired the nearly 575,000-square-foot property from Prudential at approximately $265 per square foot. Starting rents at this property exceed $45 per square foot, underscoring its status as one of the most sought-after office spaces in the area.
- 412 E Madison on the Market: The 12-story office building at 412 E Madison Street is currently listed for sale. Constructed in 1966 and encompassing 100,000 square feet, the property has been flagged for substantial deferred maintenance. This is the building occupied by Florida ROI. We have fielded many questions from interested investors and developers about the potential for redevelopment or even demolition, presenting a unique opportunity for investors eyeing prime downtown real estate.
Rental Trends
While Water Street’s developments initially led to rent increases, the pace of rent growth has recently decelerated. Despite this slowdown, starting rents in premier properties like 100 N Tampa continue to exceed $45 per square foot, reflecting sustained demand for high-quality office spaces.
Fisher Investments’ Significant Lease
Highlighting the broader strength of the Tampa office market, Fisher Investments signed a record-setting lease in early 2025, one of the largest in the area. The wealth management firm is set to occupy three full buildings at the Renaissance Center, an office campus in Tampa, effectively doubling its regional footprint. This substantial commitment underscores the attractiveness of the Tampa market to major corporations, even beyond the downtown core.
Submarket Performance: Lagging Areas
While Downtown Tampa and Westshore continue to thrive, certain submarkets are experiencing challenges:
- Northeast Tampa: This area has seen an increase in vacancy rates, now exceeding 15%. The higher vacancy rates in buildings in suburban areas such as Northwest Tampa near Hillsborough Avenue/Veterans Expressway and Carrollwood and the I-75 Corridor provide companies desiring to be in these areas with more negotiating leverage on rental rates and lease concessions.
- Northwest and East Tampa: These submarkets have experienced similar challenges, with higher vacancy rates compared to the thriving Downtown and Westshore areas. The lack of amenities and walkable environments in these suburban areas has made them less attractive to tenants seeking vibrant, accessible locations.
National Context and Tampa’s Unique Position
Across the United States, the office sector is showing signs of revival as CEOs increasingly encourage employees to return to physical workspaces. However, Tampa’s office market stands out as particularly robust. For instance, in the third quarter of 2024, Tampa’s Class A rental rates rose to an average of $35.55 per square foot, indicating strong demand for premium office spaces.
Final Thoughts
Downtown Tampa’s office market is navigating a complex yet promising landscape. Declining vacancy rates, significant leasing activity, and a resurgence in investment signal a market on the rise. While challenges such as limited new construction and slowing rent growth persist, the submarket’s resilience and appeal remain evident. As 2025 unfolds, the continued evolution of Downtown Tampa’s office market will be one to watch for businesses and investors alike.
Looking to invest or secure office space in Tampa? Contact Florida ROI today for expert guidance and tailored real estate solutions.
Frequently Asked Questions
Q: What is the current vacancy rate in Tampa’s office market?
A: As of the end of 2024, Tampa’s office vacancy rate has dropped to 20.0%, marking a 120 basis point decline year-over-year. This is the lowest vacancy level since mid-2022, reflecting strong demand for premium office space.
Q: What are the key factors driving office rent increases in Tampa?
A: The rise in rental rates is fueled by high demand for Class A office spaces, significant new lease agreements, and continued investment in premier office locations like Downtown Tampa and Westshore. Properties like 100 N Tampa now command rents exceeding $45 per square foot, showcasing the strength of the market.
Q: How does Tampa’s office market compare to other U.S. cities?
A: Unlike many markets still recovering from the remote work shift, Tampa’s office sector is rebounding faster. Class A rental rates have climbed to $35.55 per square foot, and major companies like Fisher Investments are expanding their office presence, proving Tampa’s resilience and attractiveness for corporate tenants.
