Hillsborough County: A Balanced Industrial Market

Key Market Indicators

Hillsborough County, encompassing Tampa, is experiencing a period of stabilization. The vacancy rate stands at 5.1%, which aligns with the region's 10-year average. The market has seen a shift towards build-to-suit (BTS) projects, which are expected to stabilize vacancy rates in the coming years.

Leasing and Rent Trends

Leasing activity in Hillsborough has slowed, particularly for big-box spaces over 100,000 square feet. However, the smaller spaces under 25,000 square feet remain highly active. The market's asking rent has grown by 9.8% year-over-year, with the average rate now at $12.60 per square foot. This growth, while still robust, has slowed compared to the peaks seen in previous years.

Construction Pipeline

Hillsborough County has a significant construction pipeline, with over five million square feet currently underway. Notable projects include build-to-suit facilities for Coca-Cola and Target, each exceeding one million square feet. The speculative construction, such as Foundry Commercial's 533,350-square-foot warehouse in Plant City, also highlights the ongoing demand for industrial space.

Strategic Advantages of Polk and Hillsborough Counties
Location and Infrastructure

Both Polk and Hillsborough counties benefit from their strategic locations along the I-4 Corridor, providing easy access to major highways, ports, and airports. This makes them ideal for logistics and distribution operations, attracting significant investment and development.

Affordability and Availability

Polk County offers some of the most affordable industrial rents in Central Florida, averaging $8.80 per square foot, compared to over $12.00 per square foot in neighboring markets. This affordability, coupled with a large inventory of new and available space, makes it an attractive option for businesses looking to expand or relocate.

Future Outlook
The industrial real estate markets in both Polk and Hillsborough counties are poised for growth. As the new developments lease up and the market stabilizes, vacancy rates are expected to decrease, and rent growth is likely to continue at a healthy pace. The ongoing investment in infrastructure and the strategic advantages of these locations will continue to drive demand for industrial space.

For investors, developers, and businesses, Polk and Hillsborough counties offer a dynamic and promising environment. Whether you're looking to lease, buy, or invest, the opportunities in these markets are abundant and varied.

Contact Zach Cichocki at NAI Realvest for more information on industrial real estate opportunities in Central Florida. Our team specializes in providing tailored solutions to meet your industrial real estate needs.