Tampa's Office Market: Trends, Challenges, and Opportunities Heading into 2025

cliggittvaluation • January 8, 2025

Tampa’s office market is evolving, with clear distinctions emerging between the city’s primary submarkets—Westshore and Downtown Tampa—and its secondary suburban areas. These changes are shaping the way tenants and investors approach office space in the region.


Westshore and Downtown: Where Tenants Want to Be

Westshore and Downtown Tampa continue to dominate demand. With their central locations, new construction, and abundance of high-quality Class A buildings, these submarkets are firmly established as the region’s most sought-after areas. Tenants are drawn to the convenience and prestige these areas offer, but this popularity comes at a premium.

For those seeking more affordable options, secondary suburban submarkets provide an alternative. Companies with larger space requirements often find significant cost savings in areas like Northeast Tampa or Gateway, where rents are 20% to 35% lower than in Westshore and Downtown.



Absorption Hits New Highs

Over the past two quarters, Tampa’s office market has seen over 400,000 square feet of positive absorption—the strongest performance in over three years. Much of this growth was driven by the aerospace defense company CAE USA, which moved into its new 290,000-square-foot headquarters in Westshore. Looking ahead, other major move-ins, such as Masonite’s new 128,000-square-foot headquarters, will likely help Tampa record another year of positive absorption in 2024.


Vacancy Rates Reflect Submarket Disparities

Tampa’s overall office vacancy rate remains stable at 9.6%. However, there are significant variations across submarkets. Westshore’s vacancy rate has hit a four-year low at 12%, while Northeast Tampa has seen an increase, with vacancy rates now exceeding 15%. This highlights the impact of location, amenities, and building quality on tenant decisions.


Asking Rents and Growth Trends

After years of rapid growth, rent increases have slowed. As of the first quarter of 2025, asking rents have risen 1.9% year over year, averaging $30 per square foot across the market. Class A buildings in Westshore and Downtown remain at the higher end, with rates exceeding $40 per square foot. In some premium buildings, like Thousand & One Water Street and Midtown West, asking rents range from $60 to $70 per square foot.


Interestingly, 3-star buildings are now leading the region in rent growth, with a year-over-year increase of 1.5%. These properties, often considered more affordable, are finding their niche as tenants look for cost-effective alternatives without sacrificing too much on quality.


Construction Slowdown and Selective Development

New office construction in Tampa has slowed significantly due to tightening lending requirements and market uncertainty. Developers are focusing on projects with substantial pre-leasing commitments. Notable developments include:

  • Midtown East: A 430,000-square-foot office tower in the Midtown Tampa development, already 75% leased, with TECO as the anchor tenant.
  • Gas Worx: A mixed-use project in Ybor City featuring a 115,000-square-foot office building that is 50% pre-leased to Grow Financial.
  • Halcyon in St. Petersburg: A 130,000-square-foot speculative office building, the first in Downtown St. Pete in over 30 years, set to anchor The Central mixed-use development.


Sublease Space: A Double-Edged Sword

Tampa’s sublease market is showing signs of improvement, with available sublease space falling below 3 million square feet for the first time in two years. However, this still represents 23% of the market’s total availability, the highest concentration in Florida. Much of this space is in older, less competitive properties. High-quality sublease spaces, on the other hand, are attracting interest due to their lower asking rates compared to direct leases.


Investment Activity and Pricing Trends

Office investment activity in Tampa has slowed, with sales volume over the past year totaling $770 million, well below the five-year average of $1 billion. Cap rates have risen to 9.1%, reflecting the market’s cautious outlook. However, some high-profile transactions, such as the $151 million sale of 100 N Tampa, signal continued interest in premium assets. Pricing for office properties has declined, averaging $184 per square foot, down from a peak of $200 in 2022.


The Road Ahead

Market participants remain cautiously optimistic about Tampa’s office market. While demand is steady, many tenants are downsizing as they reassess their space needs. The lack of new supply could hinder Tampa’s ability to attract major corporate relocations, but it also limits oversupply risks.

Tampa’s office market continues to adapt to changing dynamics, with opportunities for growth in both primary and secondary submarkets. Whether you’re a tenant seeking space, an investor exploring opportunities, or a developer eyeing the next big project, understanding these trends is essential to making informed decisions in this evolving market.

SHARE CONTENT

By cliggittvaluation July 25, 2025
A well-known corner of South Tampa is getting a new lease on life. The property at 2616 S. MacDill Avenue—formerly home to the popular eateries Datz and Dough—is undergoing a complete transformation led by Three Oaks Hospitality. The new concept, 1983, is scheduled to open its doors in mid-August. Three Oaks, the hospitality and development group behind successful Tampa Bay ventures like Armature Works, The Pearl, Ciro’s, Steelbach, and Ro, acquired the site in 2023 and has since begun a creative reimagining of the space. The 150-seat restaurant will introduce a sports-forward, social dining experience with an upscale 1980s-inspired aesthetic. The adjacent Dough space will become a retro arcade, paying homage to iconic video games of the past—think Pac-Man and Galaga—while the restaurant itself will offer a menu that ranges from sushi and salads to French dips and classic wings. The design will incorporate vintage sports memorabilia and a preppy flair reminiscent of 1980s fashion and culture. The project’s name, 1983, reflects the birth year of twin brothers Charles and Kyle Bruck, co-founders of Three Oaks. One thing that isn’t changing? The landmark marquee sign out front, which locals may remember for its witty one-liners. It’s being preserved and will continue to feature playful messages as a nod to the building’s legacy. This revitalization adds to the continued momentum of redevelopment along the South MacDill corridor, a high-visibility commercial stretch in one of Tampa’s most established neighborhoods.
By cliggittvaluation July 21, 2025
Tampa residents have been waiting for high-speed rail service—and it’s starting to look like that dream could eventually become a reality. Brightline, the private passenger rail company already operating in South Florida, is officially making moves toward a Tampa expansion. The company recently requested $400 million in bonds to fund new stations and tracks across Florida, with Tampa named as one of the next planned stops. That funding would help push forward rail infrastructure connecting Tampa to Orlando and beyond. So… when can we actually expect to ride? The Not-So-Soon Timeline According to Hillsborough County Transportation Planning Organization executive director Johnny Wong, we might still be waiting another decade. Yep—ten years. Wong’s projection is based on information from a former Brightline executive, now with the Orlando Economic Partnership, who noted that Brightline will need to lay new rail along I-4 before the Tampa link becomes a reality. And since I-4 is currently undergoing a massive expansion that could take up to 20 years to complete, rail construction might not begin for a while. That said, there’s some hope. Governor DeSantis and the Florida Legislature have shown interest in speeding up the I-4 project, which would naturally help accelerate Brightline’s expansion timeline as well. Why Now? Ever since Brightline opened its Orlando station in 2023 (connecting to Miami), the buzz around a Tampa extension has only grown. With Central Florida’s population booming and I-4 getting more congested by the day, many are pushing for a faster, less stressful travel alternative. Last year, Mayor Jane Castor even floated 2029 as a possible opening year for the Tampa station. And with the recent bond request and local support—including a unanimous vote from Tampa City Council to allow Brightline to proceed with financing—the wheels are certainly turning. But There’s a Catch While Brightline has ambitious plans, the company is facing some financial headwinds. It fell about 30% short of its projected ridership last year, carrying roughly 2.8 million passengers. That drop came after eliminating popular $10 commuter passes, though those have since been brought back—and early signs show ridership recovering in South Florida. Despite operating at a $63 million loss last year and carrying $5.5 billion in debt, Brightline continues to grow. And Tampa appears to be next in line. Where Will the Station Go? A final location hasn’t been publicly announced, but city officials have hinted at a site in Tampa’s “greater downtown area,” possibly stretching from Ybor City to the Curtis Hixon Waterfront Park area. In May, Hillsborough County asked residents how they would get to the future station, and the majority said they’d drive or use ride-share services. That means the city will likely need to build a parking structure and invest in safer pedestrian and bike-friendly infrastructure. Respondents also voiced a desire for more public transit near the station, which could reignite conversations about expanding the TECO Line Streetcar into Tampa Heights. What If Brightline Doesn’t Make It? Even with the financial risks, there’s a silver lining. If Brightline lays the rail but later backs out, the infrastructure could still be used by another operator—think Amtrak or even a local transit authority. As Wong put it: “If we have assets for trains to go through Tampa to Orlando, I don’t see why there wouldn’t be competitors in that space.” Source: Tampa Bay Times Thank you for your interest. Have questions regarding the local market? Navigate the Real Estate Market with confidence, and contact us at Cliggitt Valuation for your appraisal, consulting, and valuation needs today. Mike Cliggitt, MAI, MRICS, CCIM 813.405.1705 | 863.661.1165 - Direct Lines findvalue@cliggitt.com Appraisal & Valuation Markets Questions about our blog? Contact our Director of Sales & Marketing, Sydney Avolt. Sydney Avolt 727.403.7418 - Direct Line sydney@cliggitt.com
By cliggittvaluation July 8, 2025
Florida’s property insurance market is finally showing signs of recovery in 2025, following several years of volatility. A combination of legislative reforms and a resilient response to recent storms has begun to steady both residential and commercial insurance rates. For those in the commercial real estate space, this shift offers a much-needed sense of predictability. With fewer surprise exclusions and more stable premium trends, stakeholders can breathe a little easier—even if hurricane season keeps everyone on alert. In this post, we break down the effects of the 2024 hurricane season, 2025 premium trends, key legislative changes, reinsurance market updates, and what these developments mean for property owners, brokers, and investors across the state. After the 2024 Hurricane Season: Resilience in Action
More Posts