08/25/2023
The St. Petersburg market has three unique submarkets, which we will be reporting on: Downtown St. Petersburg, Gateway/Mid-Pinellas and the South Pinellas area. In reviewing this past quarter, the largest commercial sales in the market were in retail and office transactions.
In the past quarter, the Gateway/Mid-Pinellas and Downtown St. Petersburg retail sector began to see a small increase in vacancy rates. There was a significant amount of square footage available due to tenant exits and the healthy pipeline of new construction. The South Pinellas retail sector continues to see a decrease in vacancy rates due to strong demand in this area. While 120,000 square feet of new retail space was delivered recently, 100,000 square feet of that total is the new Tesla Sales and Service Center.
The industrial market in the St. Petersburg area is Tampa’s largest industrial submarket and continues to be strong. This quarter, industrial rental rates rose 12% year over year. The current vacancy rate of industrial space is rising slightly, but this is partially due to the recent and upcoming deliveries. The Gateway Logistics Center, which will encompass approximately 620,000 square feet, is set to be completed in late 2023.
In the second quarter of 2022, Mayor Ken Welch announced a Request for Proposal for Tropicana Field, the home of the Tampa Bay Rays. The Hines Group was chosen to redevelop the area, and it is estimated to be a $4.6 billion project. The redevelopment plans include 1,400,000 SF of office space, 320,000 SF of retail space, 200 hotel rooms, 5,200 housing units, 14 acres of green space, and possibly a 30,000-seat domed stadium for the Tampa Bay Rays, which is expected to be completed in 2028.
The Federal Reserve, in order to curtail inflationary conditions, has been increasing interest rates since February 2022, with 10 consecutive rate hikes to date. At the Federal Reserve’s last meeting on June 14, 2023,
the committee left the current interest unchanged. It is unclear how the increase will influence investors and trading in commercial real estate in our area. However, MS&C Commercial will continue to track the market and trends as interest rates are expected to climb throughout the rest of 2023 and into 2024.
For questions about your specific sector or business, please reach out to one of our highly skilled advisors.
By working with an experienced commercial real estate advisor like Erik Carlson and the MS&C Commercial team, you can make smart and strategic decisions that will pay off for years to come. Let us help you find the perfect property and make the most of your investment.
