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THE ECONOMISTS FINALLY TOLD US the country was in recession
– but Tampa Bay’s real estate professionals have known that for some time.
During 2008, the region’s office market experienced a net loss in activity of nearly 830,000 sf. This is the first time in 25 years that the region has closed the year with a loss; of every 1,000 feet lost, 810 are in Hillsborough. The region’s vacancy
rate swelled to 19 percent.
Pasco is the only county ending the year on a stronger footing annual activity there is at its highest mark in 16 years. But the
vacancy rate still climbed 4.5 points as new space entered the market, much of it still vacant. Pasco also was the only county to
see positive activity during the fourth quarter, albeit only 17,625 sf. Rents dipped during the fourth quarter, but for the year climbed by $.35 per sf.
At the other end of the spectrum, Hillsborough experienced its greatest net losses quarterly and annually in the nearly 25 years
MADDUX BUSINESS REPORT has covered the market. All six submarkets ended in the hole. The county’s vacancy rate ended up by 4.0
points from a year ago. Overall rents were up $.23 per sf. Westshore’s woes led the market. Class B & C space took the
brunt of the devastation, losing a total of 307,000 sf over the year.
Westshore’s asking rents soared by $1.02 in 2008. Three buildings remain under construction for delivery during 2009. Downtown
recorded occupancy losses in three of four quarters. The result: downtown’s worst close in five years. The I-75 Corridor was pushed
into the negative column for the year by a rough fourth quarter. Five buildings are under construction along I-75; three totaling 395,000 sf were completed in 2008 and remain 94 percent vacant.
Pinellas recorded net losses in three of four quarters, ending the year down substantially. But the downtown market of St. Petersburg ended unlike any of the region’s other downtowns. It actually saw decent activity two consecutive quarters, thanks largely to the opening of condo office space at Signature Place. County rents climbed by $.73 per sf for the year.
Sarasota’s fourth quarter loss – the largest quarterly loss in nine years reduced its annual activity to a near wash. Countywide
rents fell by $.53 per sf for the year. One building was completed during the year, at Lakewood Ranch, and is two-thirds vacant.
Manatee had two negative quarters during 2008 pulling annual absorption from barely positive at the end of third quarter to solidly
negative at the end of the year. Rents rose by $.57 per sf.
Polk recorded modest activity all year long. As a result the annual rate dropped each quarter eventually falling slightly to the negative side for the year. Polk was the only county to see the vacancy rate decline for the year, albeit slightly. Rents were up by $.38 per sf for the year.
The region still has over 515,000 sf of space available for sublease, which pushes its vacancy rate almost to 20 percent. Additionally, nearly a half-million sf of existing space is reportedly coming available in the next 12 months and is being actively
marketed.
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