Oh, well. Last quarter ’s surge deflates.
by Laurel S. McQueen

ONE QUARTER DOES NOT A TREND MAKE. IN JUNE, THE Maddux Report reported a surge in business park volume, mostly in Polk and east Hillsborough, following several periods of flat or declining activity. This hot summer withered any hope of sustained or broadening action within the region’s business parks.

Net absorption for the second quarter was less than 60,000 sf over the seven-county market. Only three other reporting periods have experienced a worse performance in the past decade – all since June 2001.

Nonetheless, the region’s 12-month volume moved up to 2.26-million sf from last period because this quarter’s activity a year ago was even worse. Four out of seven counties experienced upticks in their 12-month rates.

Pinellas led the market forward with 68,020 sf, more than doubling last quarter’s showing and outperforming the region as a whole. After four quarters with its annual rate in a loss position, the county finally broke onto the plus side.

The Gateway market wasn’t as lucky this quarter with a negative trend continuing with the submarket’s annual rate in the net loss column for five consecutive quarters. Good news in the Gateway, however, can be seen at MIDA Group’s growth at 34th Street Industrial Center. The company completed construction on 127,300 sf of new space and has leased 73 percent of it. Elsewhere, Regent Properties expects construction to be completed next quarter on 54,000 sf at Regent Center Roosevelt North. The entire building is already spoken for.

Pasco came in second this quarter as several leases totaling 33,000 sf were signed at West Pasco Industrial Park. The county’s vacancy rate dropped 1.3 percentage points. Construction was completed during the quarter on a 10,800-sf speculative building at One Pasco Center. It’s looking for a tenant.

After last quarter’s stellar performance – certainly its best in the past decade if not ever – Polk County caught its breath. It recorded a small loss in occupancy for the quarter, which caused the annual rate to slip 17 percent.

Hillsborough recorded a net loss for the quarter, despite more than 300,000 sf of move-ins. Regardless, the county’s 12-month volume increased as an even bigger loss from a year ago dropped from the moving rate.

Of the seven counties, Sarasota’s annual activity has been the most steady in its climb over the past year. Its 12-month volume has moved up steadily from 76,140 sf last September to 190,960 sf today, fourth largest in the region.

Manatee’s meager pickings for the quarter were nonetheless enough to push the annual rate up 47 percent to 200,000+ sf, third best in the region. But the picture may be worse than reported. One broker mentioned empty space for sale or lease by private owners as various companies reportedly are closing or going into bankruptcy. This space is within business parks, but has not been reflected in the survey charts. Nor have we been able to confirm this information at this time. On the plus side, 150,000 sf of speculative space is expected to open next quarter, nearly half of it preleased.

Hernando basically broke even with last quarter’s activity, slightly in the negative column.

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 sublease space, which is not included in analysis numbers. For questions regarding the survey, call the MADDUX REPORT research department at 727/321-3225 or email MADDUXResearch@AOL.com.