By Brian French | October 4, 2026
Quick Answer
Downtown St. Petersburg’s office vacancy held at 4.9% in 2025, among the tightest in Tampa Bay, while the Gateway submarket rose from 11% to 13.8%. Citywide office vacancy climbed from 7.7% to 9.1%, according to the City of St. Petersburg’s 2026 State of the Economy data.
Two Markets in One City
St. Petersburg’s office market no longer moves as one. Downtown has almost no available space, while Gateway, the suburban employment corridor around Carillon Parkway near I-275, is steadily adding vacancy. For landlords, investors, and tenants, the citywide average now hides more than it reveals.
| Submarket | 2024 Vacancy | 2025 Vacancy | Change |
|---|---|---|---|
| Downtown St. Pete | 4.9% | 4.9% | Unchanged |
| Gateway | 11.0% | 13.8% | +2.8 pts |
| Citywide | 7.7% | 9.1% | +1.4 pts |
Source: City of St. Petersburg 2026 State of the Economy, as reported by St. Pete Rising.
Citywide, average rents rose $3.20 per square foot to $31.25 even as vacancy increased, while Gateway asking rents remained relatively stable. That combination tells the story: tenants are paying up for downtown, and Gateway landlords are holding rents while space sits empty.
Why Downtown Stays Tight
Supply Is Shrinking, Not Demand
Downtown’s low vacancy is less about a leasing boom than about scarcity. Analysts have described a sharp contraction in the city’s office market, with viable office space being demolished or repurposed for housing and retail rather than sitting empty from oversupply. The St. Petersburg Downtown Partnership’s CEO called St. Pete “an anomaly” among U.S. office markets.
Downtown’s housing boom shows where land is going. The core now holds more than 11,800 residential units, with 2,391 more under construction or in the pipeline.
New Office Product Is Hard to Pencil
City officials have explained the economics: Class A downtown rents in the low $30s per square foot fall well short of the roughly $70 per square foot a developer needs to justify new office construction. That gap is why new supply has been slow to arrive.
The most prominent example is Halcyon, an 11-story, 125,000-square-foot Class A building at The Central on Central Avenue, billed as the first Class A office building constructed in downtown St. Pete since the 1980s. Its groundbreaking was tied to securing tenant leases, and vertical construction at The Central appeared stalled after its garage opened in mid-2025.
Landlords Have Pricing Power
Brokers see the result in rents. Avison Young reported in Q2 2026 that asking rents continued to strengthen in the St. Petersburg CBD, where sustained demand for quality space has increased landlord pricing power.
Why Gateway Is Softening
An Aging Suburban Office Stock
Gateway’s office inventory is concentrated in suburban campuses built decades ago. Major Carillon properties include 570 Carillon Parkway (1998) and Castille at Carillon (1999). These buildings offer big floor plates and abundant parking, features that drew corporate tenants in the 1990s but compete poorly with walkable, amenity-rich districts today.
Local brokers have been direct about it. One said that once you get outside downtown, the story changes quickly, and the Gateway submarket has been very soft since the pandemic.
Tenants Want Walkability
City economic development officials have noted that new businesses seem to want dense, walkable environments with nearby housing, retail, dining, and entertainment. That preference favors downtown and works against single-use office parks.
A Note on the “Exodus” Narrative
Some commentary has framed Gateway’s rise as tech firms leaving downtown towers for suburban flex space. The data does not support that. Downtown vacancy did not budge from 4.9%, which would be unlikely during a mass downtown exodus. The more accurate reading is that Gateway’s own office tenants are shrinking footprints or leaving, while downtown stays full because there is so little space to lease.
Gateway is still landing new users. Rectangle Health, a New York-based healthcare payments and technology company, recently opened a 12,500-square-foot office in the Carillon area.
The Flex and Industrial Angle
While Gateway office vacancy rises, Pinellas County’s industrial and flex market remains comparatively tight.
| Pinellas County (Q1 2026) | Vacancy | Rent |
|---|---|---|
| Class A office | 12.0% | $30.57 psf full service |
| Class B office | 9.0% | $25.22 psf full service |
| Class C office | 3.0% | $28.98 psf full service |
| Total office | 7.5% | $27.93 psf full service |
| Flex space | 6.3% | $13.30 psf NNN |
| Warehouse | 5.1% | $10.35 psf NNN |
Source: Pinellas County Economic Development quarterly update, as of April 8, 2026.
Two takeaways stand out. First, countywide Class A office has the highest vacancy of any office class, consistent with older suburban Class A buildings like those in Gateway struggling. Second, flex space is tighter than Gateway office, which suggests that some operations needing a mix of office, lab, and light industrial space are finding value in flex product rather than traditional office parks.
Why Different Sources Show Different Numbers
Readers will find conflicting vacancy figures for St. Petersburg. Listing-based sites, for example, reported Gateway vacancy at 22.76% in 2024, far above the City’s figures. Differences in methodology explain much of the gap: some sources count total available space including sublease and future availabilities, while others measure direct vacancy only. Submarket boundaries also vary by firm. When comparing reports, check what each one measures.
What It Means for Landlords and Tenants
For Downtown Landlords
- Expect continued pricing power while new supply remains limited.
- Watch new deliveries such as Halcyon, which could add competitive Class A space if it proceeds.
- Plan renewals early, since tenants have few alternatives downtown.
For Gateway Landlords
- Compete on renovation and amenities. Some owners are already investing, such as 570 Carillon, which was recently acquired and had its lobby and common areas extensively renovated.
- Consider repositioning older buildings toward medical, flex, or mixed-use concepts.
- Use Gateway’s highway access and parking as selling points for tenants drawing workers from across Tampa Bay.
For Tenants
- Downtown: Expect limited options and rising rents. Start searches 12 to 18 months ahead.
- Gateway: Use elevated vacancy as leverage for concessions, tenant improvement allowances, and flexible terms.
The Wildcard: The Gas Plant District
The biggest future variable is the 86-acre Historic Gas Plant District around Tropicana Field. In July 2026, the city selected The Burg Bid, which proposes buying about 58 acres for $275 million, with binding agreements expected to be prepared over the coming year before City Council review. Any significant office component there could reshape downtown supply, but delivery is years away. The Nov. 3 mayoral runoff could also influence the project’s timeline.
Brian’s Take
The citywide 9.1% vacancy figure is misleading on its own. St. Petersburg has two office markets moving in opposite directions, and investors who price them the same will get it wrong.
From an investment standpoint, downtown looks like a supply-constrained market with genuine pricing power. The barrier is economics: until rents approach the level developers need, little new office will be built, and existing landlords benefit. That is a favorable setup for owners of quality downtown buildings, though it is a headwind for growing companies that need space.
Gateway is a repositioning story. Its 1990s-era office parks face the same challenge suburban office faces nationally: tenants prefer walkable, amenity-rich locations. The owners who win will be those who invest in upgrades, pursue medical and flex users, or plan for eventual mixed-use conversion. With Pinellas flex vacancy at 6.3%, well below Gateway office, the market is signaling where demand actually is. I would watch for Gateway office-to-flex or office-to-medical conversions as the next value play.
Frequently Asked Questions
What are the commercial office vacancy rates in St. Petersburg submarkets?
According to City of St. Petersburg data for 2025, downtown office vacancy was 4.9%, Gateway vacancy was 13.8%, and citywide vacancy was 9.1%.
Why is downtown St. Petersburg office vacancy so low?
Downtown office supply has shrunk as older buildings are redeveloped for housing and mixed use, and new office construction is limited because current rents fall short of what developers need to build.
Why is Gateway office vacancy rising?
Gateway’s office stock is dominated by suburban office parks built in the 1990s. Tenants increasingly prefer walkable, amenity-rich locations, and some Gateway tenants have reduced or vacated space.
What are office rents in St. Petersburg?
The citywide average office rent rose $3.20 to $31.25 per square foot in 2025. Pinellas County Class A office averaged $30.57 per square foot, full service, in Q1 2026.
Is new office space being built in downtown St. Petersburg?
Halcyon at The Central is planned as a 125,000-square-foot Class A office building, the first new Class A downtown office since the 1980s, with construction tied to securing tenant leases. The Gas Plant District redevelopment could add more office space in the future.
How tight is the industrial and flex market in Pinellas County?
As of Q1 2026, Pinellas County flex space vacancy was 6.3% and warehouse vacancy was 5.1%, both lower than countywide Class A office vacancy.
Sources and Further Reading
- State of the Economy: Employment, Incomes, and Construction Value Rise in St. Pete — St. Pete Rising: https://stpeterising.com/home/state-of-the-economy-employment-incomes-and-construction-value-rise-in-st-pete
- Mayor Welch to Host 2026 State of the Economy — City of St. Petersburg: https://www.stpete.org/news_detail_T30_R1651.php
- The State of the St. Pete Economy (2024) — I Love the Burg: https://ilovetheburg.com/state-of-the-economy-2024/
- St. Pete’s Office Market Is Shrinking — St. Pete Rising: https://stpeterising.com/home/st-petes-office-market-is-shrinking-heres-why-that-matters
- Commercial Real Estate Quarterly Update — Pinellas County Economic Development: https://www.pced.org/commercial-real-estate-quarterly-update/
- Tampa Office Market Reports, Q2 2026 — Avison Young: https://www.avisonyoung.us/web/tampa/office-market-report
- Tampa Bay MarketBeat Reports — Cushman & Wakefield: https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/tampa-bay-marketbeats
- St. Petersburg Office Market Trends — CommercialCafe: https://www.commercialcafe.com/office-market-trends/us/fl/st-petersburg/
- $200 Million Mixed-Use Project The Central Takes Shape — St. Pete Rising: https://stpeterising.com/home/200-million-mixed-use-project-the-central-takes-shape-on-central-avenue-in-downtown-st-pete
- Four St. Pete Projects to Watch in 2026 — St Pete Catalyst: https://stpetecatalyst.com/four-st-pete-projects-to-watch-in-2026/
- The Burg Bid Selected to Redevelop Historic Gas Plant District — Florida YIMBY: https://floridayimby.com/2026/07/the-burg-bid-selected-to-redevelop-86-acre-historic-gas-plant-district-in-st-petersburg.html
- 570 Carillon Parkway Listing — LoopNet: https://www.loopnet.com/Listing/570-Carillon-Pky-Saint-Petersburg-FL/16235278/
- Castille at Carillon — TRP Commercial Real Estate: https://trpcre.com/property/castille-at-carillon/
- 2026 St. Petersburg Mayoral Election — Wikipedia: https://en.wikipedia.org/wiki/2026_St._Petersburg,_Florida,_mayoral_election
