Over 7.4M SF of Tampa Office Space Leases Nearing Expiration

Upcoming Office Lease Expirations in Tampa: An Opportunity for Negotiation

As we approach 2024 and 2025, businesses and organizations seeking office space in Tampa may find themselves in a strong position for lease negotiations. According to a recent market snapshot by Avison Young, a staggering 7.4 million square feet of office leases are set to expire during these two years. This presents a unique opportunity for tenants, especially in the wake of the pandemic that has significantly impacted leasing activity across various sectors.

Lease Expirations and Their Impact

Interestingly, about 45% of these expiring leases, equating to 3.4 million square feet, are for spaces larger than 20,000 square feet. As these leases expire, landlords may be forced to reconfigure these larger, less desirable spaces into smaller, more appealing floor plans to attract tenant demand.

Who's Most Affected?

Almost half of all leases due to expire in the next two years belong to companies in the banking, finance, insurance, and real estate sectors. These sectors have traditionally been the backbone of Tampa's business community. Despite a decrease in leasing activity, these sectors continue to account for the largest amount of office tenant demand post-pandemic, suggesting that these tenants will likely continue to occupy office space in the future.

Emerging Trends in Office Space Demand

While some sectors are reducing their space requirements, others are expanding. Law firms, for instance, have increased their leasing activity by 43% since the pandemic. Similarly, the consulting, research, accounting, and recruiting sector has seen a 67% increase in leasing activity. This indicates a resilient demand for office space within these professional service sectors.

Perks for Future Tenants

For those looking to lease in the next two years, there's another potential benefit. Tenant improvement allowances have risen to $53.21 per square foot as of August, an 18.5% increase since pre-pandemic levels in March 2020. This is largely due to the continued importance of high-end spaces and amenities for employers seeking to incentivize employees to return to the office.

Conclusion

As we move forward, the Tampa office space landscape is set to undergo significant changes. With a large number of leases set to expire, businesses and organizations have a unique opportunity to negotiate favorable lease terms. As always, staying informed about market trends is key to making the most of these opportunities.