Hillsborough County's office leasing activity for the past 12 months is at its highest level in over a decade. At 1.14-million sf, space absorbed has not seen this volume since January 1989 when it stood at 1.15-million sf. Not since 3rd quarter 1997 has there been another period of comparable annual leasing this past decade, and then it was 1-million sf. Yet this activity will be hard to maintain. This quarter was soft, at best, for Hillsborough. The vacancy rate rose a half point.
Downtown Tampa took a big hit as Household International (of Beneficial Finance Corp.) moved to its new facility on the I-75 Corridor. This boosted the downtown's vacancy rate up a point. Nevertheless, annual absorption moved up 14 percent as a larger net loss in occupancy from 2nd quarter 1999 dropped out of the moving rate. Downtown's Class A vacancy rate jumped up 2.5 points to 10.8 percent, while the Class B & C rate dipped a bit to 24.3 percent.
The I-75 Corridor had significant absorption. Downtown's loss was the Corridor's gain. The vacancy rate was unchanged. The previously owner-occupied, 187,500-sf Citicorp building at Corporex Park was added to the survey as it is available for lease. Two new office buildings are under construction, so the market's 25.5-percent Class A vacancy rate can be expected to go even higher during the rest of the year. In Westshore, move-outs topped move-ins for a net quarterly loss in occupancy. The submarket matched the county profile as the vacancy rate rose a half point, while annual absorption nudged up slightly.
While Pinellas's net absorption was modest, it was up 35 percent from 1st quarter. Annual absorption was essentially unchanged. At 10.3 percent the Class A vacancy rate dipped half a point. Construction was completed on the Pasco Building at Koger Center/Gateway, 28 percent pre-leased. The submarket's Class A vacancy rate dropped 1.5 points to 15.8 percent. The Class B & C vacancy rate moved up 2 points, but at 12.7 percent continues to be lower than Class A. Gateway saw the highest change in rental rates with the weighted average rent increasing $.46 per sf.
Countryside netted 19,148 sf in absorption. Clearwater and North Pinellas totaled a net occupancy loss of 22,000 sf, hence the overall net loss for North Pinellas. Countryside's vacancy rate is 4.7 percent, while downtown Clearwater is 19.1 percent and North Pinellas 12 percent. While Bayside's net absorption was modest, it was its best quarter in two years. Class A space is 5.6-percent vacant, while Class B & C space is 4.5-percent vacant.
Downtown Sarasota recorded net quarterly absorption of 23,040 sf, dropping the vacancy rate to 5.3 percent. Suburban Sarasota saw just 6,400 sf net absorption with a 12.3-percent vacancy rate. Construction was completed on Cattle Ridge Professional Center, while construction continues at Cattle Ridge Business Center, the Gateway to Sarasota and Lakewood Corporate Center at Lakewood Ranch.
Manatee's annual absorption fell 53 percent as significant leasing from 2nd quarter 1999 dropped out of the moving rate, replaced by a small loss in occupancy.
A large tenant at Pasco's Raymond James Tower moved to its own building. The county's vacancy rate climbed 2.1 points, while annual absorption dropped 44 percent.
Polk County continues to have the region's highest vacancy rate at 23.6 percent. Annual absorption fell 57 percent.
NOTE: Office buildings fully leased for two or more quarters do not appear in the survey charts. All office buildings are updated each quarter. Previous quarterly data is revised as new information is received. Survey charts may include sublease space, which is not included in analysis numbers.
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