Lowest in 10 Years
by Laurel S. McQueen

After a solid first half of the year, the Tampa Bay office leasing market turned solidly downward. Net 2001 absorption for the region was the lowest recorded in the 10 years MADDUX REPORT's survey has included six counties in the region. Absorption for 2001 was 54 percent lower than 2000's.

Hillsborough County's 2001 absorption was 84 percent lower than that of 2000, with the vacancy rate subsequently climbing 3.2 percentage points. The last year that Hillsborough suffered a lower annual rate was 1995. Additionally, at least 315,000 sf of space has been reported to MADDUX REPORT as available for sub-lease in the county. This is empty space that tenants are still paying on. Some of this space is listed in the survey charts, but it is not included in the Multi-Tenant Office Market chart below. If this space was included, Hillsborough's vacancy rate would be 17.2 percent.

Downtown Tampa saw more tenants leave than arrive in 2001. The last year that this happened downtown was in 1996. These losses were primarily among the Class B & C buildings with a total loss of 78,310 sf. However, there is at least 62,000 sf of Class A space available for sub-lease, which would raise the sub-market's vacancy rate to 18 percent.

Westshore also suffered a net loss in occupancy in 2001. This also occurred in 1999, but was followed by a solid year in 2000. This sub-market has the newest space in the region, and has an additional half million sf under construction for delivery early next year. There is a lot of inter market movement here as some companies move up to newer, pricier space, while others downsize or move to less costly space.

The North Central and I-75 Parkway sub-markets were the only Hillsborough areas to net substantial gains during the year. Netpark@TampaBay had a very successful year, and was the driving force in the north central market.

Pinellas County's net 2001 absorption was actually 30 percent higher than that of 2000, but only one sub-market benefited. The county's vacancy rate climbed 2.4 percentage points during the year. At least 165,000 sf of sub-lease space is available, mostly in Bayside and Downtown St. Petersburg. If included, this space would raise the vacancy rate to 15.5 percent.

Gateway more than doubled the 2000 leasing pace. Most of this gain though was a single-user building at Carillon. Without this space the sub-market's annual absorption dropped 61 percent. Downtown St. Petersburg's vacancy rate climbed 4 points during the year. Sub-lease space in the market raises the vacancy rate to 16.6 percent.

Sarasota County's 2001 absorption was down 30 percent from the previous year.

Pasco County's modest leasing gain during 2001 compares to a net loss in occupancy for 2000. The vacancy rate on this market dropped 3.4 points.

Polk County ended the year in a wash as far as absorption gains, but the vacancy rate climbed 2.8 points. This was caused by two buildings being sold to owner-occupants and removed from the survey and two other properties with low occupancies being added to the survey.

NOTE: Office buildings which have been fully leased for two or more quarters do not appear in the survey charts. All office buildings continue to be updated in the database each quarter. Previous quarterly data is revised as new information is received. Survey charts may include sub-lease space, which is not included in analysis numbers. For questions regarding the survey, or to receive a full survey chart, send an email request to MADDUXResearch@AOL.com. Or, call the MADDUX REPORT Research Department at 727/321-3225 or 727/8234394.