Office Users Still on Hold
by Laurel S. McQueen

It was a quiet quarter in Tampa Bay’s office space market. Real quiet – only 100,000+ sf was absorbed throughout the region, nearly 85 percent in Hillsborough County. Tire kickers are out there, but they are cautious. Class B buildings are getting more attention as companies stretch their budgets.

Hillsborough’s net quarterly absorption dropped by two thirds. As a result, the county’s vacancy rate climbed 2.1 percent. Annual absorption moved up 26 percent as this quar-ter’s net absorption replaces a dismal performance from first-quarter 2002 in the 12-month moving average.

Downtown took a blow as Bank of America moved out of 400 North Ashley Plaza, consolidating in Bank of America Plaza. The vacancy rate nudged up 0.4 point. Downtown has been hit with a net loss five of the last six quarters.

Westshore managed to stay on par with the fourth quarter, which boosted annual absorption by 26 percent. The vacancy rate dropped 0.6 point. Class A space saw a slight decline in vacancy, while Class B&C space rate dropped almost a full point.

This quarter, Highwoods Preserve I-V was added to the survey in the I-75 Corridor. This is space vacated by Intermedia Communications when parent WorldCom filed for Chapter 11 bankruptcy. This 815,000-sf addition caused a surge in the Corridor’s vacancy rate, up by 8.3 points. Sublease space that appears in our charts increased 8 percent in Hillsborough to 289,910 sf, split between Westshore and the I-75 Corridor. If this were included in the county’s vacancy rate, it would climb to 19.6 percent.

Pinellas County’s leasing activity was essentially a wash, but since a large net loss during first-quarter 2002 dropped out of the 12-month moving average, the annual absorption rate actually moved back to the plus side. Pinellas’ sublease space is 128,640 sf, which if included, would raise the coun-ty’s vacancy rate to 16.9 percent. Nearly half of this space is in downtown St. Petersburg.

Countryside managed a turnaround with net leasing of 33,730 sf. However, there’s still an annual loss of 16,080 sf
with a 10.5-percent vacancy rate. Gateway had been on a roll, but stalled during the first quarter with a net loss. Annual absorption, however, doubled as an even larger loss from first-quarter 2002 dropped out of the moving average. The vacancy rate moved up one point.

Sarasota County leasing fell 71 percent. Solid leasing from first quarter a year ago dropped out of the moving average, cutting annual absorption in half. Downtown Sarasota has now experienced eight consecutive quarters of net losses totaling 146,320 sf. Suburban Sarasota is in much better shape with annual absorption of 102,660 sf.

Manatee County managed a small gain after three quarters of losses. Annual absorption, however, fell negative as a solid
first quarter in 2002 dropped out of the moving rate. On the
positive side, Manatee’s portion of Lakewood Ranch is boom-ing
with construction activity.

No activity was reported in Pasco. Polk’s quarterly activity was a net loss, reducing annual absorption by more than half.

Quarterly data is revised as new information is obtained. Data on County Business Park Space Guides may not add up to numbers shown on Business Park Market chart as sublease space and space coming available in the next few months are shown in the guides, but not included in analysis data. For more detailed information on the survey call the MADDUX REPOPRT Research Department at 727/321-3225 or send email to MADDUXResearch@AOL.com.