Originally Published October 28, 2014
Locally, a lot of news revolves around the CSX Intermodal in the middle of the state, speculative construction in Tampa heating up, and our ports teaming up to market to users on a unified front (see links below). Although 3Q14 had less market-wide leasing activity and deal flow than previous quarters, there were more new deals done and less renewals than the prior quarter. Selfishly, I’ll note that our team completed an above average amount of deals, totaling 260,000 SF and including 11 new deals! Market-wide, lease rates on new deals increased on average by 3% across all sizes, with the biggest gains coming from the 25-50k SF range, while rates decreased on average in the 10-25k SF range. If you’re looking to lease space for your business, start the process now because landlords will have the advantage in most scenarios.
Nationally, we are following the trend that industrial is seeing whereby rates are increasing and vacancy is dropping. Dating back to 3Q13, we have had 5 consecutive quarters of positive net absorption in Tampa Bay. Probably part of the reason speculative construction is starting again. Looking at overall economic info, the Conference Board Leading Economic Index shows an increase in September as well. Even with turmoil in the financial markets, the data suggests short-term moderate growth with more risk coming from the weak advancements in the housing market.
We hope the holiday shopping season buoys the economy and buys some time until the business world starts performing again at the start of 2015. Things to look out for in 2015 include employers finding access to skilled labor in certain growth industries now that unemployment figures are improving, and also how quickly capital markets will react to the Fed likely raising rates.
EastGroup Pursues Spec Construction in Tampa - Our team drone provides you the aerial excitement