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Good
Riddance!
by
Laurel S. McQueen
The
region ’s office leasing closes the books on
its worst year in two decades.One silver lining:
South Bay.
Tampa
Bay’s office leasing market suffered its worst year since
the MADDUX BUSINESS REPORT began surveying the market in 1984.
Net absorption for 2003 was off by two-thirds from 2002. Leading
the way downward has been Hillsborough County, which endured
a net loss for the first time in 20 years of coverage.
Meantime,
South Bay (Sarasota and Manatee counties)
absorbed more office space than the region’s two largest
counties combined, and for the first time led the Tampa Bay
region in leasing activity. Driving that growth is Lakewood
Ranch community. Sarasota alone has put together an
impressive run, averaging 224,900 sf a year for 2000-2003.
Hillsborough’s
glory days for multi-tenant office space were
in the mid to late 1980s when annual
absorption averaged 1.4 million sf a
year. During the 1990s the county
averaged 577,000 sf absorption per year. And during the first
four years of the new century the average has fallen to 356,000
sf. From a year ago, the county’s vacancy rose 3.1 points
to
19.5 percent. It hasn’t been this high since 1992, the
last recession.
The county has at least 554,000 sf available for sublease;
adding this in would increase the vacancy to 21.4 percent.
Over the
last three years downtown Tampa has endured a
combined loss of 298,000 sf. The last time it experienced
a
successive three-year loss (242,000 sf total) was 1989-1991.
Downtown’s vacancy rate closed 2003 at 21.1 percent,
the
highest level in eight years.
Westshore
dug a deeper hole with fourth quarter’s results. Its
net loss of 245,920 sf in 2003 easily tops the market’s
worst performance in two decades. The vacancy rate is up 1.2
points from year-end 2002, and at 16.0 percent is the highest
recorded in Westshore in 20 years of coverage. Pinellas County
improved over 2002 by ending in positive territory at 109,610
sf. During the 1980s, Pinellas averaged 502,000 sf per year
in net leasing. The average slipped in the 1990s to 405,000
sf per year. Over the last four years the average has plunged
to 151,000 sf. The vacancy rate, if sublease space is included,
is 14.8 percent at year end.
After
two years of net losses the Clearwater and North submarket
squeaked out a small gain in 2003. Downtown Clearwater endured
a second consecutive year of losses and ended with a 15.3-percent
vacancy rate. Downtown St. Petersburg had an average year
for this century. The annual absorption was half what the
market averaged during the 1990s. Its vacancy rate (7.5 percent)
is the lowest of any submarket covered. However, available
sublease space downtown would drive the rate up to 13.6 percent.
Until
2003, Polk County had never ended the year with a net loss
since we began surveying it in 1992. Since the inception of
the survey the county averaged 41,800 sf per year, until this
year when it suffered a loss of 34,870 sf. Pasco County had
a reasonably good year for a small county. Only four other
years since 1992 have shown greater leasing activity. The
county’s vacancy rate dropped 2.5 points to 12.3 percent,
the lowest of all counties.
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.
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