Park Leasing Soft
by Laurel S. McQueen

Business park leasing continued to be soft through the third quarter this year. Hillsborough County is now running at an annual net loss in occupancy, while Polk County now has the region's highest level of net annual absorption. Six of the region's counties posted modest net quarterly absorption during the third quarter. MADDUX REPORT now surveys over 30 million square feet of industrial space in Hillsborough County's Business and Industrial Parks. After moving upward for four quarters, Hillsborough's vacancy rate moved slightly downward. The total of all move-ins across the county was 428,660 sf, while move-outs totaled 305,270 sf. In the sub-market West of Interstate 275 net occupancy losses kept the annual absorption rate in the net loss category. The vacancy rate climbed 1.5 percentage points. Construction was completed on the first building at Crown Park @ Benjamin Road. The 73,255-sf building is 55 percent vacant.

East of I-275 a reasonably good quarter of net absorption was not enough to lift the sub-market's annual absorption out of the net loss column. At this time last year annual absorption was over one million sf. A large build-to-suit at Oak Creek is due for completion during this quarter. Barring major move-outs. Pinellas County move-ins (122,810 sf) barely topped move-outs (117,090 sf). Annual absorption plunged 51 percent as solid leasing from third quarter 2000 dropped out of the four-quarter moving rate.

The Gateway sub-market suffered a quarterly net loss in occupancy that pushed the vacancy rate up nearly a point. Significant move-outs were recorded at Bay Vista and Keystone Business Center. Sixty five percent of the county's space under construction is in Gateway, all of which should be completed by Dec. 31. Manatee County's third quarter net absorption was more than three times higher than third quarter 2000, moving annual absorption up 16 percent. Construction was completed during the quarter on the rest of Sarasota Bradenton Commerce Center north of the airport. The entire center is available for lease, representing more than half of the county's vacant space. Without this space the county's vacancy rate would be 3.1 percent.

Sarasota County's vacancy rate dipped half point, remaining the lowest rate among the major counties. Construction was completed during the quarter on a 40,000 sf build-to-suit at Tower Commerce Park and on 27,000 sf of spec space at Sarasota County Interstate Business Park.

Pasco County saw the biggest decrease in the vacancy rate, down 1.3 points. Annual absorption was up 17 percent, according to Maddux Report surveys. In Polk County, Interstate Business Center was added to the survey, with 75 acres for sale. Construction was completed during the quarter on 166,800 sf of speculative space at Lakeland Interstate Business Park – all available.

Over the last five years the region's average quarterly net absorption has been 723,200 sf per quarter. Looking at a shorter term, over the last two years the quarterly average drops to 588,770 sf per quarter, a 19 percent drop. At 31 percent, Hillsborough has seen the greatest drop between these two averages.

NOTE: Quarterly data is revised as new information is obtained. Data on County Office Space Guides may not add up to numbers shown on Business Park Market chart as sub-lease space and space coming available in the next few months are shown in guides, but not included in analysis data.
For more detailed information on the survey call the MADDUX Research Department at 727/321-3225