Good Year, Sad End
by Laurel S. McQueen

The strong march through 2000 of Tampa Bay's office absorption ground to a halt in the fourth quarter. The overall quarterly pace dropped 42 percent. However, for the full year 2000 it was a prettier picture, with regional absorption up 38 percent.

Hillsborough County's net fourth quarterly absorption was almost non-existent, presaging the year's total, which ended with a slight 3 percent dip compared to the 1999 level. The vacancy rate moved up 0.6 percentage point from a year ago. Across the county, Class A space netted 746,730 sf absorption during 2000, dropping 1 point to a 10.6 percent vacancy rate. The county's weighted average rent moved up $.30 per sf.

The downtown Tampa market had the quarter's only significant absorption movement. Absorption for the year moved up 9 percent from 1999. Downtown's overall vacancy rate was down 1.2 points from a year ago, but the Class A rate was up 1.8 points to 10.6 percent.

Westshore saw a large drop in occupancy during the fourth quarter as the move to new space continued. This quarter's drop is not quite as great as last quarter's increase. Annual absorption for the year soared to nearly 400,000 sf from a net loss in 1999. This submarket had the county's largest rent increase, moving up $.49 per sf.

The building boom in the I-75 corridor also added over 300,000 sf of new space to that submarket during the year. As a result, the vacancy rate climbed 5.4 points. Annual absorption dropped 40 percent from the 1999 level.

Pinellas County's fourth-quarter absorption was down 54 percent, but absorption in 2000 was 55 percent higher than in 1999. The new Franklin Templeton Group's building at Carillon, which opened during the third quarter, represented 59 percent of the county's annual absorption. Overall, the county's vacancy rate was down 0.5 point from a year ago.

North Pinellas's absorption was 58 percent below the 1999 level with only the downtown Clearwater market reporting positive net absorption.

Gateway's annual absorption was more than double the 1999 level, but if the new Templeton building is removed from the figures, the market saw a 39-percent decline in absorption. The vacancy rate moved down 1.4 points during the year.

Downtown St. Petersburg's 2000 absorption jumped 33 percent from the level a year ago. The vacancy rate dropped 2.9 points. Class A space, however, saw a 1.7-point increase, ending the year at 8.3 percent vacant.

Sarasota County's vacancy rate dropped 1.7 points during the year. Annual net absorption of 328,000 sf was the highest recorded since the Maddux Report began surveying the market in 1985. It was 17 percent higher than in 1999. The suburban Sarasota market garnered 64 percent of the year's absorption, with downtown Sarasota taking 31 percent and Venice the remaining 5 percent.

Manatee County's annual absorption fell 47 percent from the 1999 level. The vacancy rate slipped 0.6 point during the year. Rents were up $.47 per sf.

Pasco suffered a net loss in occupancy last year. The vacancy rate moved up 1.4 points while rents dipped $.06 per sf.

In Polk County the annual absorption was 17 percent higher than 1999, while the vacancy rate dropped 3.8 points.

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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.
For more complete information call the Maddux Report's Research Department at 727/321-3225.