All is Quiet
Sarasota commands half the region's new construction.
by Laurel S. McQueen

IT WAS A QUIET QUARTER IN THE TAMPA BAY REGION'S OFFICE leasing market with modest net quarterly absorption that was nevertheless an improvement over first quarter's net loss in occupancy.

Hillsborough County had the region's only reasonable level of net quarterly absorption, rebounding significantly from first quarter's doldrums. The quarter's gain, however, was less than half of the level from the same quarter a year ago (which dropped out of the moving annual absorption rate) dropping annual absorption by 71 percent. Annual absorption for Hills-borough's Class A space is 115,030 sf, with rents averaging $20.62 per sf.

The stock of sublease space (space that is leased but empty and avail-able) appearing in our survey charts fell to 310,00 sf in Hillsborough. Most of this space is split between Westshore and the I-75 Corridor. If this empty space were included in the county's vacancy rate it would climb to 18.1 percent.

The Westshore market was the county's most active during second quarter. Move-ins totaling 182,500 sf were reported at 19 buildings, while move-outs totaling 122,160 sf were report-ed at 14 buildings. The vacancy rate dipped a scant .4 per-centage point, but the Class A rate grew .9 points to 13.6 per-cent. Class A rents average $22.07 per sf.

In Pinellas County activity was reported at just a third of the properties in the survey. Move-ins totaled 118,281 sf at 27 buildings and move-outs totaled 115,830 at 27 buildings. Pinellas has at least 145,160 sf of sub-lease space available, which, if included, would raise the county's vacancy rate to 17.8 percent. Most of this space is in downtown St. Petersburg.

Mid and north Pinellas continued to soften, Countryside moved up to 11.3 percent vacant, while the downtown Clearwater market rose to 16.2 percent and the Dunedin-Palm Harbor area climbed to 19.4 percent.

The Pinellas Gateway had the county's only noteworthy quarterly absorption, but this amount was just 19 percent of the level reported during second quarter a year ago. With that absorption dropping out of the four-quarter moving rate, Gateway's annual absorption falls into a net occupancy loss for the first time in eight years.

Manatee County reversed course from last quarter's big gain, falling into net occupancy loss territory. Annual absorp-tion fell 34 percent. But nearly a quarter of the region's new construction is happening at Manatee's Lakewood Ranch Town Center.

Sarasota County also dropped into net occupancy loss ter-ritory, after two very solid quarters. Annual absorption fell 9 percent. Sarasota has over 50 percent of the region's new construction ­ all along the I-75 Corridor. Downtown Sarasota recorded its fifth consecutive quarter of net occupancy losses, with the annual loss now totaling 110,825 sf. The vacancy rate downtown is 14 percent.

Pasco County's small net occupancy loss pushed the annu-al rate into negative territory as well. Average rents moved up slightly. Polk County had the opposite story. Its small net absorption nudged the annual rate back to the plus side, albeit by a tiny amount. Average rents dropped slightly.

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 quar-ter. 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, call the MADDUX REPORT Research Department at 727/321-3225 or email at MadduxResearch@AOL.com.