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Why Tampa Lacks New Office Space

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Tampa’s office market has seen little to no new development in recent years despite low vacancy rates, rising rents and healthy job growth.

Several interconnected factors contribute to this:

– Rental rates for existing Class A office space are about 20% lower than what developers require to justify new construction.

– Office users’ uncertainty over space needs makes them hesitant to pre-lease space in an undeveloped building.

– Lenders have tightened underwriting requirements for developers to secure financing for new office properties.

– New technology, condensed office spaces, and more flexible work environments allow tenants to improve the utility of their current spaces.

Ryan Kratz, Colliers International Florida

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