TAMPA, Fla. — As housing prices skyrocket in Tampa Bay, a different trend is happening in the commercial real estate market.
The vacancy rate on commercial real estate property in Tampa is hovering around 13%-14%, according to Derek Seckinger with Grimaldi Real Estate Corporation, due in part to companies downsizing their physical office spaces, or not returning to office spaces as the economy recovers from the COVID-19 pandemic.
What You Need To Know
- Housing prices continue to rise in Bay area
- Commercial real estate is seeing a different trend, with a growing vacancy rate
- Trend, mostly due to pandemic, not likely to continue, industry experts say
"I think the trend is only going to be temporary,” Seckinger said. “I think there has been some miscues from the government and kind of what is going on with COVID lately. I think we are going to see some changes."
As the pandemic broke out and companies scrambled to keep businesses open, many discovered that work-from-home scenarios for employees were proving to be more cost effective, eliminating the need for expensive leases and office-related expenses.
As employees have slowly returned to work, many companies have downsized office spaces and found ways to manage offices more efficiently.
But that move has also led some companies not to renew long-term leases, and some companies have subleased properties for which they still have contracts.
Commercial and retail space in Tampa isn’t necessarily a bad thing, though, as more people and businesses choose to move to Florida from other parts of the country.
“We are going to start seeing those vacancy rates definitely come down,” Seckinger said. “With all the influx of people moving here, more businesses moving here, I think that number is going to be trending downward."
And Seckinger said developers are still targeting prime locations for new construction of commercial properties and are paying premium prices for building materials.