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TAMPA BAY’S OFFICE MARKET continues its downward tumble. Over the last 12 months the region has experienced a net loss in activity of nearly a million square feet – the region’s sharpest loss in 25 years.
All six counties surveyed experienced greater vacancy rates from last period. For every 1,000 square feet of multi-tenant office space in the region, 200 square feet stand vacant. All counties but
Pasco have seen move-outs top move-ins over the past 12 months.
And, finally, asking rents have begun to drop.
Pasco is the market’s one aberration with a 12-month growth of
158,000 sf. Even so, its vacancy rate
climbed to the highest in the region –
29.5 percent – and its asking rents were
slashed from last quarter by an average of $1.27, or 7.6 percent.
As Hillsborough’s office market goes, so goes the region. Three
submarkets managed small gains the first quarter, but they were
far outweighed by Westshore’s losses. The county’s 12-month loss
accounts for three out of every four feet lost regionally. Its vacancy rate
ratcheted up by 1.1 points. Anecdotally, effective rents are falling as
liberal concessions are being granted to get anyone in the door.
The past 12 months, Westshore has marked over a half-million
sf of losses – nearly 80 percent of the county’s downturn. The I-75
Corridor is Hillsborough’s only submarket to show an annualized
gain, recording three small positive quarters out of the last four.
Downtown took a breather this quarter from consecutive losses.
Pinellas was the county with the region’s greatest quarterly
loss, at 141,740 sf. All five submarkets contributed. Downtown St.
Petersburg benefited from the signing of the first lease at 100 Bay
Central (space vacated in 2007 by Florida Progress). But that was
overshadowed as the lease expired on space vacated earlier by
BB&T at First Central Tower. North county had the other big loss,
almost all of it at Prestige Place in Countryside.
Sarasota now has experienced losses in three of the last four
quarters, precipitating its first annualized loss in eight years. Downtown
is the hardest hit of the county’s submarkets. Asking rents for
the county dropped an average of $.20 per sf.
Manatee reported a quarterly gain, but 12-month activity
slipped a bit more into the negative. Asking rents dropped $.28
per sf. The vacancy rate jumped by 2.1 points, primarily because
three buildings with large vacancies were added to the survey.
Polk, after four quarters of nominal action, was hit this period
with its largest loss in 17 years, since this magazine began covering
the county. Its vacancy rate climbed by 2.5 points.
The region still has over 510,000 sf of space available for sublease.
Factoring this in would push the market’s vacancy rate up to
21.1 percent. Moreover, more than 900,000 sf of space is under
construction in the region, only 12 percent of which is reported as
pre-leased. And nearly one-half million sf of existing space that’s
reported as opening up in the next 12 months is being actively
marketed.
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