Moves Haunt Space Activity

The Tampa Bay region's business park market activity was a mixed bag during the third quarter as a spectacular amount of positive activity was undercut by heavy move-outs. Across the region a total of 1.08 million sf was reported leased, but 702,000 sf of reported move-outs knocked the wind out of the leasing story. Hillsborough County was the scene of the biggest knockout with 410,000 sf of new leasing completely overshadowed by 514,000 sf of move-outs. The county's vacancy rate climbed to 13 percent.

The territory west of I-275 was the scene of 54 percent of the move-outs, pushing the vacancy rate there up nearly three points. During the quarter, construction was started on a new business park, Eagle Creek Industrial, which has 97,000 sf coming out of the ground.

East of I-275 there was a net positive move during the quarter, with move-ins at 18 locations and move-outs at 16. Construction was completed on 68,280 sf at Fairfield Commerce Park and on 53,192 sf at Pinebrooke Commerce Park. The combined space opened at 58 percent leased. Crescent Business Park, in the southern part of the Parkway area, is getting its first building space with a 307,000 sf facility under way for Progressive Insurance. Construction was started on 186,000 sf of speculative space at two other Parkway area locations.

Pinellas County rebounded this quarter, with net leasing totaling more than the previous three quarters combined. However, the quarter's performance was less than half of the net from the third quarter a year ago, so overall there was a 39 percent decline in annual absorption. For the second quarter in a row, the Pinellas Gateway suffered a net quarterly loss in occupancy. The sub-market's annual absorption hit the skids, dropping 87 percent.

South of the bay, both Manatee and Sarasota counties experienced moderate leasing levels. Manatee's net leasing dropped 41 percent. Space at Airport Manufacturing Center that had been leased but was never occupied, went back onto the market, pushing the vacancy rate up slightly. Palmetto Corporate Center accounts for 70 percent of the county's total vacant space. Factoring out that location, the county's vacancy rate dropped to 3.3 percent.

Sarasota County's leasing activity recovered from a wash last quarter, but the resulting net absorption was still only half the level of activity in the third quarter last year. As a result, annual absorption dropped 40 percent. Construction was completed during the quarter on 65,750 sf at two locations and a 31,000-sf facility was started for Multi Brands Corporation at Jacaranda Commercial Center.

Pasco and Hernando each recorded a move-out at one location, with no other activity reported. Pasco's annual absorption dropped 31 percent while Hernando has now had a net loss in occupancy for the last twelve months. However, construction was started on speculative space in both counties during the quarter: 17,500 sf at Odessa Industrial Park in Pasco, and 10,800 sf at the Airport Industrial Park in Hernando.

Polk County had a one-third drop in net quarterly absorption and a 31 percent drop in annual absorption. Construction was completed during the quarter on 178,500 sf of space at the Ruthven Center-Knight's Station, with 53,100 sf taken by Coastal Unilube. Saddle Creek upped its stock of public warehousing space by 70,000 sf, fully leased, and began construction on an additional 120,000 sf. Across the region, the boom in speculative space construction continues, with 1.15 million sf currently under construction. Through the third quarter a total of 1.36 million sf of spec space has been completed in 1998. This 2.5 million sf of new space is 19 percent ahead of the pace at this point in 1997.

For more complete information on the survey call the Maddux Research Department at 727/321-3225.