By Julia Rettig, Senior Director, Industrial Services & Chris Owen, Director, Florida Research
Tampa Bay is an active, consumer-driven region in the forefront of changing retail and logistics trends. Consumer demand and service expectations drive the industrial market and 3PLs to continuously improve upon service delivery and fulfillment.
Retailers seek to take advantage and prioritize fulfillment and distribution, with many users in Tampa Bay expanding or consolidating their current operations to create more efficient networks. The last mile is rapidly becoming the last yard.
RETAILERS ARE OUTSOURCING DISTRIBUTION NEEDS
Many retailers are outsourcing their order fulfillment support to delivery companies and 3PLs to meet customer expectations in a hypercompetitive landscape. This is creating a need for larger facilities that require more upland space. Warehouse sites under development that provide space for larger operations have become extremely attractive. Examples are a well-known global supply chain user’s acquisition of a 520,000-square-foot (sf) speculative building under construction at Lakeland’s Key Logistics site, as well as Blue Steel’s two buildings in the same market, which are set to deliver in the next six to 12 months, for 498,000 sf and 350,000 sf, respectively.
REQUIREMENT SIZES IN I-4 CORRIDOR ARE BECOMING LARGER
Requirements by users announced within the I-4 Corridor today mimic the size of transactions that are customary in larger, first-tier markets like Atlanta, Chicago and South Florida.
A strong indicator of Tampa Bay’s attractiveness to large users is the recent announcement by Dallas developer Xebec, which is developing a 60-acre site in Lakeland along I-4, with construction of a 533,000-sf facility expected to commence in the fourth quarter. The finished facility will have 40-foot clear heights and a 185-foot truck court with 114 docks, 368 automobile parking spaces, and 102 container parking spaces.
Other developers are also finalizing projects for any contingency. Aspyre Properties is in design for a 550,000-sf facility at its Interstate Commerce Park, and Brennan Investment Group is under construction on its remaining 440,000-sf pad after leasing a 605,000-sf facility to Quaker. The Quaker property later fetched a record setting cap rate for a Tampa Bay-region industrial sale.
STRONG COMPETITION FOR LARGE BLOCKS OF SPACE
The market for large blocks of space remains competitive. Developers that can deliver over 600,000 sf of contiguous industrial space remain rare. McCraney Development is poised to fill the market need, should the opportunity arise, with a permit-ready 800,000 +/- sf pad in hand along the I-4 Corridor in Plant City.
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