New Space Fills Quickly
by Laurel S. McQueen

The leasing picture across the Tampa Bay business park market reversed itself during second quarter, as Hillsborough and Pinellas counties rebounded nicely from flat first quarters while the four smaller counties in the survey went flat after notable first quarter results. Construction was completed on nearly 500,000 square feet of space in Pinellas County during the quarter, with 85 percent of it leased. Pinellas'net quarterly absorption was at its highest level in two years and more than doubled annual absorption.

The Pinellas Gateway was the primary beneficiary of this construction and leasing boom with nearly 400,000 sf of completed space and 71 percent of the quarter's net leasing. The first two buildings were completed at Gateway Business Park, its space taken by Jabil Circuit Inc. and NetToy.com. Gateway's annual rate returned to the plus side after two quarters of net annual losses in occupancy.

Across the bay, Hillsborough County saw the completion of 366,000 sf of new space, 50 percent of it occupied. The combination of respectable leasing activity and new space introduced to the market left the vacancy rate unchanged. Annual absorption moved up 10 percent.

In the sub-market west of I-275, 107,900 sf of space was completed at Airport Commerce Center, three-quarters of which is leased to the U.S. Postal Service, Forward Air and National Parcel. Net quarterly absorption was negatively impacted by a large move-out at Hanna Distribution Center, however. Annual absorption for the sub-market was flat while the vacancy rate nudged up 0.9 percent.

East of I-275, leasing activity was strong with Johnson Controls taking 51,385 sf at Fowler Distribution, and Beltman Group taking 23,136 sf at Hopewell Distribution. Several leases were signed at netpark.TampaBay (the old Eastlake Square Mall) totaling 72,300 sf. And a 92,200 sf building was completed at Fairfield Commerce Park for FACS Records Center. At Plant City Commerce Center, 156,000 sf of speculative space was completed and is available for lease. Annual absorption moved up 13 percent while the vacancy rate nudged down slightly in this sub-market.

Elsewhere around the region, Manatee County had the best leasing quarter pushing, the vacancy rate down slightly. Without the large block of space available at Palmetto Corporate Complex, the county's vacancy rate is just 1.9 percent. At Airport Commerce Center, 25,000 sf of new space was completed and occupied. Sarasota's second-quarter results were modest, but a welcome increase from the previous two quarters which totaled only 3,860 sf. The vacancy rate slipped slightly to a low 1.6 percent. Annual absorption moved up 25 percent because a very low quarter a year ago moved out of the calculations for the moving rate.

Pasco County's leasing activity was primarily in the Zephyrhills Airport area, with the completion and leasing of space at Chauncy Road Industrial Airpark and Zephyrhills Municipal Airport. Pasco's annual absorption moved down 13 percent for the same reason reported in Sarasota.

In Polk County, The Ruthvens completed 40,000 sf at a new location along New Tampa Highway. New leasing was reported at only two locations in Polk County, while GEICO moved out of 86,000 sf at Lakeland Airside Center. Polk's annual absorption dropped 68 percent.

Hernando County, which had zero vacant space available last quarter, saw one 1,500 sf space open up this quarter. New space is under construction at the Airport Industrial Park.

Across the region construction on 940 million sf of space was completed, with spec building accounting for 82 percent of it. An additional two million sf of space - 78 percent speculative - is currently under construction. Pinellas County accounts for just over half of this construction, and only 2 percent of that space is pre-leased or build-to-suit.

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