Survey Says: Strong 1998

Business park leasing turned in a strong performance for the Tampa Bay region as a whole in 1998, with 2.74-million sf absorbed in the seven west central Florida counties surveyed by the Maddux Report. This leasing level was complemented by a boom in construction. More than 2.64-million sf of space - both speculative and build-to-suit - was completed during the year.

As might be expected, vacancy rates climbed in five counties as new buildings became available. Space surveyed in the market increased by 6.35-million sf during the year. (This figure is a combination of newly constructed space and existing space that was not previously reported in the survey.)

Hillsborough County was the region's strongest performer, with net leasing of 1.16-million sf during the year, with the annual rate helped along by strong fourth quarter net absorption of 845,290 sf. Hillsborough's share of the region's construction boom was 1.32-million sf - 53 percent of the total. The county's vacancy rate moved up 4.1 percentage points last year as surveyed space increased by 2.96-million sf.

The sub-market east of I-275 netted the lion's share of activity in the county. Fourth quarter net absorption was 637,260 sf, pushing the 1998 total to 1.03-million sf. Construction completed during the year totaled 1.06-million sf, including 307,000 sf completed during fourth quarter for Progressive Insurance at Crescent Business Park, and 263,500 sf at Fairfield Commerce Park. The markets vacancy rate moved up 5.6 percentage points during the year.

West of I-275, fourth quarter net absorption was 208,020 sf, which pulled the 1998 leasing total from a net loss position to a positive 130,650 sf. Completed construction in this market was 255,220 sf. During the fourth quarter 97,000 sf was completed at Eagle Creek Industrial Park, fully leased to Graebel/Tampa Bay Movers, and 69,500 sf was completed at LynnMar Commerce Park, including build-to-suits of 25,000 sf for American Commercial Truck and 23,000 sf for SEA Inc.

Annual absorption in Pinellas County was down 45 percent from the 1997 level, with a total net of 418,440 sf absorbed. Dillard's vacated a large warehouse at Gateway Business Park, helping to reduce the fourth quarter net absorption figure to just 33,230 sf. Construction was completed on 437,350 sf with Harrod Properties leading the way due to its third quarter completion of Bryan Dairy East. The county's vacancy rate moved up 1.4 points.

Manatee County saw net leasing of 296,115 during 1998, up 48 percent from the 1997 level. Construction was completed on 232,800 sf of space, and the vacancy rate moved up 1.4 percentage points.

The Sarasota County market netted 103,670 sf of absorption last year, a 68 percent decline from the previous year's total. The vacancy rate edged up .2 points for the year, while surveyed space grew by 116,630 sf.

At 177,500 sf, Pasco County's 1998 net absorption was nearly level with the previous year's total. Fourth quarter absorption was 70,650 sf, of which 50,000 sf was a build-to-suit for Welbilt Corporation at Trinity Oaks Commerce Park. Pasco was one of two counties in the region in which the vacancy rate dropped during the year, here by 3.5 points.

In Polk County the survey grew by 1.05-million sf, while new construction totaled 338,500 sf. During the fourth quarter, 120,000 sf of public warehousing was completed and leased at Saddle Creek Corporate Center.

Hernando County's net absorption last year was 21,750 sf, with 37,500 sf added to the survey during the year.

Across the region, the speculative space portion of the new construction boom was 1.83-million sf built during 1998. An additional 1.75 million sf was under construction moving into 1999. This combined total of 3.85 million sf of new space is 11 percent ahead of the pace set in 1997.