Occupancy Up, Except...

The office leasing picture improved slightly across the Tampa Bay region during the second quarter with the noticeable exception of Hillsborough County, which bucked the positive trend by suffering a net loss in occupancy.

Net quarterly losses were noted in four of Hillsborough's six sub-markets. Overall, the county's annual absorption slipped 13 percent. Class A space saw a net loss of 62,230 sf, and there was a $.22 per sf decline in weighted average rents. Class B and C space recorded net quarterly absorption of just 6,810 sf, while weighted average rents moved up $.96 per sf. The county's largest net occupancy loss was in downtown Tampa, where continuing banking industry shifts caused space adjustments. Annual absorption dropped 48 percent. Class A space recorded a 76,290 sf drop in occupied space and rents dropped $.15 per sf.

Construction was completed during the quarter on the Fountain Square Centre in Westshore, while construction began on a new building at Tampa Bay Park. Westshore's annual absorption was down 60 percent, and the Class A market saw a net occupancy loss of 55,310 sf while the Class B and C market was flat. Class A rents nudged up $.06 per sf.

The I-75 corridor was the only Hillsborough sub-market to make notable gains this quarter. Class A net absorption was 73,730 sf, while Class B and C net absorption was 19,830 sf. Average Class A rents moved up $.69 per sf.

Pinellas County regained what it lost in the first quarter. A very large quarterly absorption from the second quarter of 1998 dropped out of the annual absorption statistics, plunging the 12-month rate 91 percent. Class A net absorption was 67,480, sf, while Class B and C space saw a net occupancy loss of 19,840 sf. Class A rents were up $.16 per sf.

The downtown Clearwater sub-market saw net quarterly absorption of 42,150 sf, which dropped the vacancy rate 6.7 percentage points. Both the Countryside and Dunedin-Palm Harbor-Tarpon Springs markets saw net occupancy losses of about 2,500 sf. Net Class A absorption for the North Pinellas market was 51,230 sf. Class A rents moved up $.35 per sf.

The Castille Building at Carillon came on line in the Gateway area this quarter. Class A space in the sub-market recorded net absorption of 26,020 sf. Class A rents were unchanged; Class B and C rents moved up $.06 per sf.

In downtown St. Petersburg, renovations are under way on the former Cramer Federal Building, now renamed Bayview Tower. The building will increase the sub-market's gross leasable space by 9 percent. For the second quarter, the market saw a net occupancy loss of 6,950 sf in Class A space and net absorption of 24,050 sf in Class B and C space. Class A rents were up $.07 per sf.

Manatee County's high absorption level is attributable to the leasing of the entire 600 Building to various governmental agencies. Annual absorption moved up 73 percent. Weighted average rents dropped $.17 per sf.

In Polk County, construction was completed this quarter on two developments: SunTrust Plaza and Westwoods. The combined total of 116,000 sf was 45 percent pre-leased. Polk's weighted average rents were up $.39 per sf.

Downtown Sarasota and Venice sub-markets recorded net occupancy losses of 1,690 sf and 1,000 sf, respectively. The suburban Sarasota sub-market recorded net quarterly absorption of 19,265 sf, but Class A rents dropped $.28 per sf.

Pasco County experienced a second quarter of a slight net occupancy loss, dropping the annual rate to just 1,400 sf. Rents dropped $1.19 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.