"Central Florida remains one of the most attractive markets (in the United States) in which to buy office buildings and is also one of the most cost-effective areas to do business," the G&E executive says in the report. "The local economies will continue to attract new businesses and encourage the expansion of existing ones."

Tampa Bay office buildings this year have sold for an average $97 per sf versus $81.91 in 2002; $85.50 in 2000; and $76.69 in 1999, according to Grubb & Ellis research.

Orlando office buildings have averaged $108.79 in the first half of this year compared to $96.83 in 2001; $119.56 in 2000; and $103.61 in 1999.

Cap rates on Tampa Bay office buildings this year to date are not shown in the Grubb & Ellis data. For first quarter 2000, however, cap rates averaged 9.72%; 11.21% in fourth quarter 1999; 10.73% in third quarter 1999; and 10.66% in second quarter 1999.

Orlando area office buildings showed an average cap rate of 10.05% in first quarter 2000; 10.53% in fourth quarter 1999; 10.67% in third quarter 1999; and 9.96% in second quarter 1999.

Sweeney says Central Florida is expected to create positive employment growth in 2002. But that is not what Orlando's new unemployment and job-creation figures are showing.

New jobs in metro Orlando are surfacing at only one-third the rate of 2000, according to Dr. David F. Scott Jr., executive director, Dr. Phillips Institute for the Study of American Business Activity and Phillips-Schenck Chairholder, University of Central Florida, Orlando.

Scott, who has monitored the metro Orlando job scene for 20 years, expects an average Orlando area unemployment rate of about 4.2% for all of 2003 if new jobs are created at the existing rate of 10,000 per year.

Preliminary September unemployment figures show 4.8% versus an adjusted August figure of 5.2%. September's adjusted number is expected to come in at 5%. The September 2001 unemployment level was 4.3%. The total number of non-agricultural jobs in Central Florida in September was 906,700, down by 3,200 from the same 2001 period.

Still, Sweeney contends, interest rates are at their lowest level in 30 years, "further encouraging capital investment in real estate." He says "very few new projects are scheduled to come on line, thereby limiting new competition in the immediate future."

Sweeney says that "because capital is plentiful and cheap, there is an abundance of dollars chasing a limited number of real estate investment opportunities with acceptable returns to investors."

He says buyer and seller return expectations in the investment market are at opposite ends.

"This disparity will decrease as returns justify the investment risk associated with the specific investment," Sweeney says. "Additionally, there is a significant inventory of sublease space still available, limited short-term rental growth and restraining office property values."