No Lull in Space Boom
by Laurel S. McQueen

After a multiyear lull in construction activity, more than one million square feet of new space came on line in Hillsborough and Pinellas counties alone during the final quarter of 1999. And the boom continues. More than 700,000 sf of space is still under construction across the region.

In Hillsborough, 858,254 sf of space was completed during the quarter. The new space drove the county's vacancy rate up 2.9 percentage points. Final absorption for 1999 was down 14 percent from 1998. Class A space ended the year at 11.6 percent vacant, while the Class B and C space vacancy stood at 13.1 percent.

Hillsborough's boom was led by the first building at International Plaza - Corporate Center I - in the Westshore submarket. This 383,694 sf building hit the market 70 percent pre-leased. Also in the Westshore market, Westlake Corporate Center was completed, and construction continues on Lake Point II at Tampa Bay Park. Closely following the delivery of all this new space is the rush to inter-market movement. Move-ins in Westshore totaled 372,500 sf while move-outs totaled 222,993 sf. The submarket's vacancy rate climbed 2.1 points. Absorption for the year was down 11 percent from the previous year's level.

In the northwest submarket the third building at Woodland Corporate Center was completed. Aetna moved there from Westshore. Premier Corporate Center II opened fully leased. Construction was started on a fourth building at Woodland Corporate Center for delivery in 2000. The submarket's 1999 absorption was up 60 percent from 1998.

Along the I-75 Corridor, Hidden River Center III was completed. Construction continues on Legacy 100 and at Northwood Business Center at Tampa Telecom Park. The corridor's 1999 net absorption was down 26 percent from 1998.

Across the bay, Pinellas was a little quieter. Absorption for the year was down 50 percent. Class A space ended the year at 12 percent vacant, with a 12.2 percent vacancy rate for Class B and C space. In downtown St. Petersburg the renovation of the former Cramer Federal Building was completed, reopening as the BayView Tower. Downtown's 1999 absorption was 12 percent higher than in 1998.

In Pinellas Gateway/Mid-Pinellas, construction continues on the second building at Fairways at Bardmoor and on the Pasco Building at the Koger Center. The market's 1999 absorption was down 69 percent from the previous year.

North Pinellas saw a net quarterly loss in occupancy during the fourth quarter, attributable to the downtown Clearwater market. For the year, downtown had net absorption of 37,420 sf. Countryside's net 1999 absorption was 20,190 sf while the northern sector of that submarket had a net occupancy loss of 2,225 sf for the year.

Sarasota County's year was flat, with net 1999 absorption down 98 percent from the previous year. Downtown Sarasota had net 1999 absorption of 16,150 sf. Construction was started on Kane Plaza. Suburban Sarasota recorded a net loss in occupancy of 27,730 sf for the year. The Venice market netted 13,580 sf in 1999.

In Manatee County, the fourth quarter was a wash. Overall, absorption for the year was down 59 percent from 1998.

In Polk County the quarter's activity ended in a slight loss, but for the year absorption was three times the previous year's level. Construction continues on Regency Tower in Lakeland. Pasco County's quarter was the best in nearly two years, but the total for the year was down 66 percent from the 1998 level.

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