Tampa ended 2003 with a negative net absorption of 100,000 sf, the market's worst performance since 2000 when the negative absorption number dropped to 136,000 sf. Class A vacancies are at 19.7%; direct vacancies, at 15.7%. "Although leasing picked up during the third and fourth quarters (of 2003), it was not enough to make up for the negative absorption and leasing activity experienced during the first quarter," says Colliers Arnold research associate Jeremy Kral.
Class A rents average asking base rents are $19.77 per sf; the overall rental rate is $17.89 per sf. "With lower rents than most of the larger metropolitan markets, an economy as diverse as it is resilient and a workforce that is growing in size and stature, Tampa Bay is well-positioned to emerge from the recession as a strong contender in this new economy," Kral says.
Besides a growing sublease volume, also holding back Tampa Bay's net absorption numbers is the four million sf of new construction that has been added to the market since 2000, the Colliers Arnold report notes.
Northeast Tampa was the hardest hit submarket in 2003, ending the year with a negative net absorption of 772,342 sf. The MCI space alone has remained vacant for more than a year. "Until Highwoods Preserve is occupied, this park will continue to negatively affect Northeast Tampa," says Kral.
The 6.5-million-sf central business district is showing a negative net absorption of 81,347 sf with about 1.3 million sf of direct and sublet space available for lease. "That number has risen at a fairly consistent 1.5% since 2000," the researcher says. Class A vacancies are at 20.6%; direct vacancies, 18.4%. The CBD submarket has been in the negative absorption column since 2000.
Westshore, Tampa Bay's largest office market with 11.6 million sf, ended 2003 with positive net absorption of 32,151 sf; a class A vacancy level of 17.7%; and class A average asking base rents of $21.77 per sf. A total 287,000 sf of new product is under construction.
Despite the soft numbers, Kral predicts office leases and sales "will begin to gather steam during the first quarter and will remain vibrant throughout 2004." He adds that concessions, "which drove many long-term leases and expansions in 2003, should begin to decrease by year-end.
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