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

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Florida Approves Conservation Purchase of 340 Acres in Hernando County

By cliggittvaluation • June 10, 2025

In a surprising turn, Florida officials voted Tuesday to approve the purchase of 340 acres of forest land in Hernando County from Cabot Citrus, a luxury golf resort once at the center of a heated public lands controversy. This time, there’s no land swap involved—just a straightforward acquisition aimed at expanding conservation efforts near the Withlacoochee State Forest. The vote came from the Florida Cabinet, with Gov. Ron DeSantis, Attorney General James Uthmeier, and Agriculture Commissioner Wilton Simpson all in favor. If Cabot Citrus sounds familiar, it's because the resort drew fire last year after receiving initial approval to trade more than 300 acres of state-preserved forest for land it hoped to develop into more luxury golf amenities. The backlash was swift and widespread. After the Tampa Bay Times reported on the proposed trade, public outcry escalated, and Cabot quietly pulled the deal. Though DeSantis didn’t comment on the Cabot purchase specifically during Tuesday’s meeting, his office later celebrated the conservation deal in a press release, grouping it in with other land buys. Simpson, who previously supported the land swap proposal, offered a lengthy post-vote statement that subtly acknowledged the controversy and praised the new direction: “We paused, looked at alternatives, and ultimately arrived at a better path — one that serves the long-term interests of Florida and its people,” he said. He also commended Cabot for “shifting focus and prioritizing conservation,” calling the outcome a model for how land preservation decisions should unfold. Notably, just weeks ago, Gov. DeSantis was photographed golfing in a Cabot Citrus hat alongside Florida Fish and Wildlife chair Rodney Barreto, further fueling speculation about the resort’s influence. The land now on the table for acquisition sits directly southeast of Cabot’s current footprint—home to multiple golf courses and luxury cottages starting at $1.7 million. It borders the same area the company previously sought to acquire via land swap. The state still needs to appraise the land to determine its value. According to the Florida Department of Environmental Protection, the purchase price won’t exceed the appraised value. If the deal moves forward, the Florida Forest Service has agreed to manage the land and integrate it into the broader state forest system. While many conservationists welcomed the move, they also expressed caution. Eugene Kelly, president of the Florida Native Plant Society and a Hernando County resident, said the shift is promising but remains wary: “It would be great to see the land added to the state forest,” he said. “But I see all these mixed signals coming from the state.” Kelly has also called for full funding of the Florida Forever land acquisition program, urging lawmakers to allocate at least $100 million after earlier budget proposals offered none. After a string of recent land-use controversies—including efforts to develop state parks and transfer pristine conservation land to mysterious LLCs—this decision marks a rare about-face. Whether it signals a long-term commitment to conservation or a one-time course correction remains to be seen. 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

St. Pete Beach Shuts Down Boutique Hotel Proposal

By cliggittvaluation • June 2, 2025

Plans for a 104-room boutique hotel on the east side of Gulf Boulevard were unanimously rejected by St. Pete Beach city commissioners during a May 13 meeting, effectively halting the proposed Windward Pass Resort. The decision denied the developers a conditional use permit, a hardship variance, and access to room credits from the city’s lodging pool. The project, which would have included six stories, waterfront boat access to McPherson Bayou, a three-story parking garage, two pools, a miniature golf course, bars on the ground and rooftop levels, a 12-slip dock, and more, was met with strong opposition. Developers sought 104 temporary lodging unit credits from the district’s 325-room allocation. However, with Hotel Zamora already approved for 64 units, only 261 credits remain for future projects—making this request a significant ask. City Planner Brandon Berry reminded attendees that unlike the western portion of Gulf Boulevard—where lodging is permitted by right—the Bayou Residential District does not allow temporary lodging as a matter of course. “This is not a lodging-permitted area,” he explained. The 2.67-acre site is one of the few remaining large, undeveloped waterfront parcels on the east side of Gulf Boulevard. Despite its size, project architect Jack Boziak argued that the site’s irregular shape—ranging from 293 feet wide on one end to just 125 feet on the other—left less than 40% of the land buildable after accounting for setbacks and drainage requirements. He called this a clear hardship. But commissioners weren’t convinced. Commissioner Betty Rzewnicki emphasized that the lot consists of four separate parcels and is located in a clearly residential area: “You’re trying to introduce a commercial resort into a residential neighborhood. That’s not a hardship—that’s a zoning mismatch.” Commissioner Joe Molholland echoed that sentiment, citing concerns about putting a large hotel with a rooftop bar in a low-density district. “This isn’t the western side of the beach where that kind of activity is expected,” he said. Commissioner Lisa Robinson also pointed to concerns about increased noise, traffic, and overall intensity: “A 104-unit condo hotel with multiple amenities is a lot for this area. The noise and density are already issues. Adding more would overwhelm the neighborhood.” Environmental concerns played a major role as well. Mayor Adrian Petrila specifically called out the potential damage to the shallow bayou and its manatee habitat: “This isn’t just a question of land use—there’s a real environmental impact to consider,” he said. “Even the so-called 'quiet pool' won’t be quiet in practice. I’ve been to enough resorts to know better.” In the end, the commission found that the proposal failed to adequately address community concerns or offer solutions to mitigate the negative impacts. Without clear benefits to the neighborhood and no meaningful compromises presented, all requests—including the rooftop bar and the 104-unit credit allocation—were firmly denied. 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

Retrospective Appraisals for Commercial Properties in West Central Florida

May 20, 2025

In commercial real estate, understanding a property's value at a specific point in the past can be just as important as knowing what it’s worth today. Whether you’re dealing with an insurance claim after a storm, an estate settlement, or a legal dispute, retrospective appraisals can play a critical role—especially here in West Central Florida where market conditions shift rapidly and weather events are frequent. What Is a Retrospective Appraisal? A retrospective appraisal is exactly what it sounds like: an appraisal with an effective date in the past. It allows us to determine what a property was worth at a specific historical moment, based on the conditions and data available at that time. Unlike current or prospective appraisals, this type requires the appraiser to essentially “recreate” the market as it existed on that date—everything from sales comps to economic factors and the property’s condition. These types of reports are essential in several scenarios: Storm-related insurance claims : Establishing pre-loss value after hurricane damage Estate settlements : Determining fair market value as of the date of death Litigation support : Supporting disputes like business dissolutions or eminent domain Property tax appeals : Contesting over assessed values from prior years Financial reporting : Accurate historical valuations for audits or compliance Why They Matter in Florida Florida’s West Central region has seen rapid growth, market fluctuations, and its fair share of natural disasters. A solid retrospective valuation is often the foundation for a fair resolution—whether it's getting a tax adjustment or ensuring heirs aren’t hit with unnecessary capital gains. For example, Pinellas County encourages owners to seek certified appraisals to verify a property’s value before a storm—especially if they’re trying to comply with FEMA’s 50% Rule for rebuilding. Similarly, when a commercial property is inherited, a date-of-death appraisal ensures tax basis is properly adjusted for the new owner, which can have long-term financial benefits. Our Approach at Cliggitt Valuation At Cliggitt Valuation, retrospective appraisals are one of our specialties. We’ve completed these assignments for everything from small retail buildings to complex industrial facilities across Tampa, St. Pete, and Lakeland. Every report we prepare is: Detailed and data-driven , often requiring historical sales, old records, and archived financials Tailored to the local market , reflecting our deep knowledge of past market cycles in West Central Florida Credible and defensible , written with clarity and strong support so it holds up in court, with insurers, or in tax discussions Responsive and timely , because we know how important deadlines are in legal or estate matters We’ve helped clients with hurricane claims, tax disputes, estate transfers, and more. Each time, our goal is the same: to deliver a reliable and accurate value opinion that helps our clients move forward confidently. Final Thoughts Retrospective appraisals may look backward, but they’re one of the most forward-focused tools we have in real estate. When done right, they provide the foundation for sound decisions—financially, legally, and strategically. If you need a retrospective appraisal or just want to talk through a situation where one might apply, don’t hesitate to reach out. We’re here to help you look back, so you can move forward with clarity. 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