Office Analysis - 4th Quarter 1998

Space Is Going, Going . . .

The Tampa Bay region's office market recorded a 23 percent increase in absorption in 1998 compared to 1997. Four of six counties saw gains ranging from 28 percent in Hillsborough to a rate 15 times the previous year's in Manatee. Hillsborough County recorded 913,300 sf of absorption during 1998. And nearly 1.7 million sf of space was added to the survey, including new construction completed in three of five sub-markets. The county ended the year with a vacancy rate of 9.4 percent, down just a tenth of a point from 1997.

The I-75 corridor had the best year of Hillsborough's five sub-markets with total net leasing of 427,210 sf - which established a rate 10 times higher than in 1997. The market's vacancy rate increased by 5 points during the year, as 568,000 sf of new space was added.

Downtown Tampa saw a 40 percent decline in absorption for the year, recording net leasing of 225,840 sf. The vacancy rate edged up slightly, 13 percent, and construction was completed on 180,000 sf at Two Harbour Place.

Westshore's 1998 absorption level was 95 percent less than the previous year's, with a total of 120,620 sf. The vacancy rate dipped six-tenths of a point to 5.9 percent. During the fourth quarter, construction began on the first of two planned office buildings at North Westshore Boulevard and Spruce Street. That's 383,700 sf, 24 percent of it pre-leased.

Across the bay in Pinellas County, the 1998 absorption level was down 7 percent compared to 1997, with total net leasing of 617,845 sf. The vacancy rate dropped 1.5 points in 1998, during which the market grew by 544,000 sf.

At 76,720 sf, Bayside's absorption was three times the 1997 level as the vacancy rate dropped 5.8 points. Pinellas Gateway recorded a 76 percent increase in annual absorption, reaching 475,075 sf. The vacancy rate dropped 3.9 points.

Absorption in downtown St. Petersburg dropped 75 percent from the 1997 level, with net leasing of 54,160 sf. The vacancy rate dropped 2.9 points.

Manatee County recorded net leasing of 155,910 sf during 1998 - the best year since Maddux Report started collecting office data on the county in 1986. The high figure is largely attributable to the Security Link by Ameritech building at Lakewood Ranch, which accounted for 64 percent of Manatee's annual absorption.

Sarasota County's absorption was more than double 1997's, totaling 125,610 sf. Construction was completed on 226,000 sf of new space at five locations, and the vacancy rate moved up 1.8 points.

Pasco County's 35,070 sf of absorption was up 51 percent over 1997. The vacancy rate dropped 5.5 points. Polk County shows a 58 percent decrease in annual absorption, netting 26,260 sf for the year. The vacancy rate fell 1.8 points.

Across the Tampa Bay region weighted average rents increased by $.20 per sf during the fourth quarter. Hillsborough experienced the biggest increase ($.56 per sf) but Manatee saw a $.02 per sf decrease. In downtown Tampa, rents increased $.57 per sf, while in Hillsborough's Northwest sub-market rents decreased $.83 per sf. Pinellas County had very small rent increases except for Bayside, which increased $.37 per sf. Sarasota's rents were up $.21 per sf, while Pasco and Polk each saw increases of $.17 per sf.

NOTE: Office buildings fully leased for two or more quarters do not appear in the survey charts. All office buildings are updated each quarter. Previous quarterly data is revised as new information is received. Survey charts may include sub-lease space, which is not included in analysis numbers.