(Carl Cronan is editor of Real Estate Florida.)
TAMPA, FL-Proving there's always someone out there willing to take on someone else's surplus, office tenant prospects in the Tampa Bay market are actively seeking sublease space no longer needed by primary tenants. One local broker has compiled four such deals totaling more than 58,000 square feet in recent weeks.
Jack Hoskins, senior vice president with CB Richard Ellis in Tampa, negotiated a 25,127-square-foot sublease on the top floor of the 11-story Bayport Plaza building on Rocky Point to Walter Investment Management on behalf of MMA Financial. Also, at the nearby Waterford Plaza building, Hoskins negotiated a 13,396-square-foot sublease to law firm Groelle & Salmon by Aon Consulting.
During current economic conditions, when prospective office tenants are reluctant to commit to direct leases, Hoskins says subleases provide an attractive alternative. He wouldn't disclose how much less the rent will be for the remaining terms, some up to seven years, but did confirm that they are well below the $30-per-square-foot range currently sought at Rocky Point's waterside buildings.
"It offers more flexibility, the terms are shorter and the space has already been built out," Hoskins tells GlobeSt.com. "Part of the trick is to have the right subleases available."
In some instances, tenants are able to move from class B space to class A subleases for less rent than they were paying under a prior lease, he adds. More favorable terms may be found for space that has been on the market a while, though the Bayport Plaza space was listed for only two weeks, he says.
Other subleases handled by Hoskins include 12,609 square feet to Arbitration Forums Inc. by KB Homes at Buschwood Park II in northwest Tampa. Also, RBC Dain Rauscher subleased 7,472 square feet to Paradigm Learning at the City Center building in Downtown St. Petersburg.
Sublease space has been on the rise over the past year in the Tampa market, especially among class A properties where it accounted for 2.7% of inventory, or 448,000 square feet, through the first quarter, according to Randy Smith, regional research director at GVA Advantis. Overall class A vacancy topped 20% last quarter, with average full-service rent reaching nearly $25 per square foot, he says.
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