Q1 2016 Commercial Real Estate Roundup
April 15, 2016
The Tampa area continues to be a magnet for new residents and young talent, according to the latest release of US Census data. Hillsborough County’s population increased by 30,725 in the 12-month period ending July 2015, representing an impressive 2.33 percent growth rate. This jump propelled Hillsborough County to the number two spot in the state for total population, at 1.35 million. The area's attractiveness as a destination for both residents and businesses is spreading nationally and internationally, providing an excellent platform for future growth and increasing economic competitiveness. The county’s Planning Commission projects Hillsborough’s population to reach 1.8 million by the year 2040, a figure which is generally regarded as conservative. At this rate, we'll surpass those projections much sooner. Strong employment growth is fueling the demand for both office and industrial space. In March, year-over-year job growth continued at a healthy rate of 3.4 percent, with the addition of 41,800 new jobs. In step with Tampa’s strong demographics and job growth, the local industrial market has made significant strides over the year. Cushman & Wakefield reported that for the first quarter of 2016, the overall vacancy rate for Tampa’s industrial space declined to 6.2 percent, compared to 7.8 percent one year ago. At the end of this first quarter, Tampa’s West Side submarket, which encompasses the area surrounding Tampa International Airport, registered a 5.1 percent overall vacancy rate, while the East Side submarket posted a 7.3 percent vacancy. Changing supply chain configurations are driving fulfillment locations closer to population centers. The entire region is feeling this impact, and new build-to-suit construction is gaining momentum in Tampa. Earlier this year, EastGroup Properties completed a 108,000-square foot distribution center for Mattress Firm in Oak Creek Commerce Park. In December 2015, All American Containers, a full service packaging solutions provider headquartered in Miami, acquired a 5.35 acre site in Madison Business Park. Now the company has begun construction on a new 88,000-square foot facility for its Tampa operations. Improved market fundamentals are encouraging developers to activate plans for new speculative industrial construction, primarily in the East Tampa and Plant City submarkets. At Madison Distribution Center, EastGroup Properties is underway with two additional buildings to complete its four-building, 285,000-square foot distribution complex. With anticipated delivery this September, Building 400 offers 68,062 square feet with 24-ft clear height and Building 500 will have 77,062 square feet with 30-ft clear height. Just south of Madison Distribution Center off Falkenburg Road, another business park under new ownership is kicking off its first development. In December 2014, Atlanta-based TPA Group acquired the 49 acre site and is now marketing the development as Grand Oaks 75 Business Center. With a site plan totaling 670,000 square feet, the developer has just announced plans to break ground in May on the first building. It will total 168,902 square feet with 30-foot clear height and be available for occupancy by the final quarter of this year. In Plant City, along the County Line Road corridor, Central Florida Development (CFD) has recently completed its second 100,000-square foot building at County Line Commerce Center which has 85,000 square feet available for immediate occupancy. In addition, CFD has plans to break ground soon on its next business park, Central Florida Commerce Center. This park, located on a 72-acre site along County Line Road, will accommodate up to eight buildings and over one million square feet of distribution / light industrial development. Tampa’s inventory of industrial development sites extends throughout Hillsborough County, with many “shovel-ready” opportunities to accommodate a wide range of needs. In addition, Port Tampa Bay has been enhancing the infrastructure and development potential for its land sites, especially at Port Redwing /South Bay, located near TECO’s Big Bend power plant. The entire area of Port Redwing is characterized by large tracts of prime, available land on or with immediate access to deep water and with rail access. Its potential is huge for shipping, manufacturing and specialized, complementary development. Interested in learning more? I invite you to contact me at 813.518.2650.