Leasing activity is strong in some segments of Tampa's office market, with Corinthian Colleges signing a ten-year deal for nearly 115,000 sf at NetPark near I-75 in the second quarter, Smith reports. However, he observes that most local landlords are concentrating on renewing existing tenants to maintain occupancy and cash flow.

More than 4.5 million sf of new office is on the drawing board locally, according to an estimate by CB Richard Ellis, though many brokers aren't convinced that all those plans will come to pass. For example, Philadelphia-based Rubenstein Partners has postponed an ambitious 580,000-sf waterfront office project in Westshore, called West View Corporate Center, because of the economic slowdown and faltering demand for new space.

Westshore, the city's largest office submarket with a current inventory of 11 million sf, also maintains the lowest local vacancy rate at just above 10% through the second quarter, according to both GVA Advantis and CBRE estimates. Landlords are attempting to hold the line on asking rents at just above $25 per sf, with class A space commanding nearly $30 per sf, though Smith notes that sublease space in Westshore has increased by 53% through the first half of this year.

Downtown Tampa's office market, with 6.5 million sf of inventory, seems to be holding its own even with tenant activity cooling, Smith says, adding that "a healthy tenant base has limited the CBD's exposure to excessive sublease space." Vacancy measured 17.9% at midyear, 16.1% for class A, with asking rents for class A space actually rising a couple of dollars over the past year to an average of $23.55 per sf, he says.

Investment activity in Tampa's office sector has slowed down significantly, with only $73.7 million in sales posted through the first half of 2008, less than a quarter of the $316.8 million posted through the first six months of 2007, Smith says. The only notable transaction during the second quarter was Orlando-based Eola Capital's acquisition of the Buschwood III building in northwest Tampa for $19.3 million, or $112 per sf.

However, Smith notes that transactions could pick up in the current quarter, with USAA Real Estate having sold two Westshore buildings in July for $47.3 million. Four significant buildings in Westshore and one office tower in Downtown Tampa are now in various stages of the marketing and sale process, he says.