Office Buildings from 1,000 SF to 5,000 SF in Size (Data & Charts from CoStar)

The above chart displays the sales price trend based on the average price per square foot for smaller offices in Polk County, Florida. Over the last decade the small office market has experienced an upward trend in the average price per square foot of building area. The average price per square foot ranged from $70/SF to $165/SF from 2012 through most of 2015 with an abnormality in 2015. In 2017 prices began escalating out of that range of the prior 4 years. In 2021 and 2022, sale prices per square foot leveled out for an average of $150/SF, and in 2023 prices have began to jump up nearly $100 more at almost $250/SF. 

Average Office Prices ($/SF) – 1,000 SF to 5,000 SF Office Buildings

• 2014 - $75/SF to $125/SF
• 2015 - $90/SF to $190/SF
• 2016 - $65/SF to $105/SF
• 2017 - $75/SF to $165/SF
• 2018 - $105/SF to $175/SF
• 2019 - $90/SF to $105/SF
• 2020 - $90/SF to $250/SF
• 2021 - $110/SF to $150/SF
• 2022 - $145/SF to $150/SF
• 2023 YTD - $155/SF to $245/SF

The above chart displays the total dollar volume of transactions that have occurred over the last decade for small office properties ranging in size from 1,000 SF to 5,000 SF. The overall trend in $ volume of transactions has been upward over the last 10 years. The last 3 quarters of 2021 volume jumped and ranged between $6.5 million and $9 million per quarter with the 3^rd quarter of 2021 having over $9 million in transaction $ volume. Sales volume declined in 2022 and 2023 with an abnormality in the second quarter of 2022 at nearly $10million in transaction $ volume. The below chart overlays the trend in average price per square foot with the trend in total dollar volume of transactions.

Asking rents for small office space in Pasco County have also been on a rise over the last decade. From 2012 to 2017 asking rent nudged upward year over year. Then in 2018 and through 2019 average asking rents for small office spaces jumped $15 to $18 per square foot and then stabilized more dramatic increases in 2020 from $18 to over $22 per square foot. Rent decreased in early 2021 and gradually increased and stabilized in 2022 from $19 per square foot I mid-2021 to an average of $21 per square foot in 2022. In 2023, we have seen asking rents jump up to just over $24/SF.

The vacancy rate for small office space in Polk County has trended downward over the last decade after reaching a high of 15% vacancy in 2013. By 2018 average market wide vacancy had reached 4% to 5% range and stabilized at that level for a few years until 2020 where a abnormal 7% high came on. More recently over the 2nd half of 2022 and 1st half of 2023, vacancy rates for small office space (1,000 SF to 5,000 SF) in Polk County dropped from 4% to sub 2%.