"The lease values are going up in virtually every submarket in Tampa and vacancies are going down," Colliers Arnold executive vice president and director of brokerage services Russ Sampson tells GlobeSt.com. "There are two speculative office buildings in development, that's big news for Tampa. Speculative office construction has not happened for a long time."

According to the report, vacancy rates held steady during the quarter and finishing the year at 10.1%, the lowest rate since 1999. As a result, new office product is being constructed. New completions totaled 374,104 sf in the fourth quarter, the largest single quarter total for the past two years. Current space under construction at the end of the quarter was 1.27 million, including both build-to-suit and speculative projects. "New building completions and space under construction are the dominating headlines for the office market at this time," the report states.

Another dramatic change in Tampa over the year was the increase in lease rates, due to new construction, increased operating costs from rising tax and insurance rates and the decreased availability of space. Class A average direct asking lease rates progressed from quarter to quarter at the following increments: $21.04, $21.36, $21.69 and $22.52 at the end of the year. "It's good news from a landlord's perspective," Sampson says. "Supply is limited and demand is strong."

Like other areas of Florida, the Tampa office market is buoyed by steady population and job growth. Florida continues to have the fastest job growth rate and lowest unemployment rate of the ten most populous states, with 27,200 jobs created in Tampa from October 2005 to October 2006. This represents a job growth rate of 2.1%, compared to a national job growth rate of 1.5% for the same period, according to the report.

Sampson says the growth is likely to continue as demographic trends are likely to be similar in the coming years. "As long as Florida continues to have strong population and job growth, the commercial real estate market will continue to grow," he says. "Tampa is a strong market. I see it settling down a bit, but it's still a strong market."