First Loss in a Decade
by Laurel S. McQueen

For the first time in ten years, the business park market suffered a net loss in occupancy across the region. West Hillsborough, Sarasota and Hernando counties saw positive absorption totaling just over 92,000 sf, but it was not enough to compensate for losses across the rest of the region.

Hillsborough's annual absorption level dropped 54 percent from the fourth quarter 2000. The vacancy rate moved up 1.1 percentage points, back into double digits. West Hillsborough benefited from the completion of 90,500 sf of spec space that opened at 68 percent leased. The vacancy rate still slid up slightly, while annual absorption dropped 41 percent.

In East Hillsborough, a 112,000-sf build-to-suit for Black and Decker Corp. and 90,000 sf of speculative space was completed during the first quarter. But four very large move-outs negated gains from new space. The submarket's vacancy rate moved up 1.2 points, while annual absorption dropped 59 percent.

Pinellas County saw move-outs totaling nearly 202,000 sf and new leasing of only 66,000 sf during the quarter. As a result, annual absorption dropped 41 percent. The vacancy rate crept up 0.8 point. Construction was completed during the quarter on 78,000 sf of spec space, which at this writing is 79 percent vacant.

Polk County recorded 234,000 sf of new leasing, but this was tempered by 312,000 sf of move-outs, giving the county a net loss in occupancy for the quarter. The vacancy rate climbed 2.2 points while annual absorption dropped 42 percent. Construction was started during the quarter on 166,800 sf at Lakeland Interstate Business Park.

Two build-to-suits totaling 25,000 sf were completed at West Pasco Industrial Park in Pasco County, but the absorption of this space couldn't overcome losses at Odessa Industrial Park a few miles southeast. Annual absorption plummeted 63 percent because this quarter's net loss replaced the largest quarter of absorption ever reported in Pasco County in the moving annual absorption rate. Space was completed at the new Louis Avenue Development at the end of 2000, but not reported in time for the fourth quarter report. Consequently, fourth quarter numbers have been revised to include 30,000 sf of absorption.

Two build-to-suits were completed at the Hernando County Airport during the quarter. The first was 45,000 sf for the Florida Air National Guard, and the second was 7,000 sf for MCR American Pharmaceuticals Inc. This gave Hernando County its best absorption recorded since the Maddux Report began surveying the county in 1994.

South of the bay, new space totaling 88,320 sf was added in Sarasota County at Tower Commerce Park and Northgate Business Center. This boosted the vacancy rate 1.0 point. Annual absorption dropped 31 percent.

Little activity was reported in Manatee County, and the vacancy rate ticked down 0.1 point. Annual absorption climbed 94 percent because this quarter's net loss in occupancy was much smaller than that of first quarter 2000. A new speculative park, Sarasota Bradenton Commerce, is under construction, which will deliver 257,000 sf of warehouse space to the market upon completion.

Across the region there is 1.27 million sf of speculative space under construction, up 11 percent from first quarter 2000. Manatee County has 45 percent of this new construction. However, a large portion of this has been under construction at Airport Manufacturing Center for nearly two years and seems to be stalled. Construction has slowed down considerably in Hillsborough and Pinellas from last year's level - down 37 percent and 61 percent, respectively.

Quarterly data is revised as new information is obtained. For more detailed information on the survey call the Maddux Report Research Department at 727/321-3225.

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.