Business Bounds Back

The region enjoys its second-best quarter in five years. Six of seven counties report positive growth. Polk shines. Business park activity often is an early sign of business expansion,usually leading the movement of office space. Stay tuned.

by Laurel S. McQueen

Tampa Bay’s business park activity started the year with a bang. Annual absorption for the region has not been this high – 2.09 million sf – in two years. Only one period in the past five years (fourth quarter 1999) experienced more expansion than this first quarter’s addition of 1.06 million sf. Six of the seven counties reported positive growth. Only one word describes Polk County: hot. Its first quarter absorption – 661,590 sf – was the highest in 15 years, since the MADDUX REPORT started surveying its business parks. Annual absorption soared to over a million sf for the first time as well. A 275,000-sf build-to-suit for Ford Motor Co. in Duke Realty’s new Park 27 Distribution Center led the way. Exel Logistics leased 199,361 sf at Florida Central Park and The Ruthvens inked leases totaling 134,250 sf. The vacancy rate dropped 4.4 points.

Hillsborough came in second as quarterly absorption nearly tripled and the annual rate grew 58 percent. The vacancy rate, however, notched up a slight 0.1 point as over a million sf of space – some old, some new – was added to the survey. East of I-275, seven big chunks of space (over 25,000 sf) were taken down. The vacancy rate dipped .5 point while annual absorption soared 118 percent. The market west of I-275 saw a net loss with move-outs at two parks. This, combined with the completion of 103,310 sf of speculative space at Expressway Commerce Center A, pushed the vacancy rate up 1.7 points.

Activity in Pinellas – the region’s second-largest market – was so slim that its annual rate dropped back to a loss position. There’s very little open land to build on. Construction was completed during the quarter on 73,010 sf of spec space at Fortune 2000. Gateway had a better quarter. Finally, after three quarters of net losses, some positive movement occurred. It wasn’t enough, however, to rescue the annual rate. The submarket has seen its annual rate hover in net loss territory for five of the last six quarters. The vacancy rate dropped 1 point.

In Sarasota, net quarterly absorption nearly tripled that of fourth quarter 2002, pushing annual absorption up 20 percent. The vacancy rate dropped by 1.1 point. Manatee’s annual absorption dropped 56 percent as a large figure from first quarter 2002 dropped out of the 12-month moving average. The vacancy rate inched up 0.4 point with the completion of 61,000 sf of spec space at Gulfcoast Corporate Park.

Pasco’s annual absorption grew by 30 percent; the vacancy rate dropped 0.7 point. Construction began during the quarter on a 10,800-sf spec building at One Pasco Center. Hernando’s Sunshine Grove Industrial Park sold at the end of the year. The new owners evicted several tenants, resulting in the county’s quarterly loss.

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 REPORT Research Department at 727/321-3225 or send email to MADDUXResearch@AOL.com.