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Slowed Spending, More Space Lead to Retail Vacancy

TAMPA, FL-Marcus & Millichap expects the local rate to top 10% this year.

By Carl Cronan | Updated on June 25, 2009

TAMPA, FL-A combination of added space and reduced spending is driving up retail vacancy locally. Area commercial real estate brokerages estimate that vacancy has already reached at least 8% overall and will likely surpass 10% later this year, putting it on par with the local unemployment rate.

Retail spending in the Tampa Bay market is on course to decline by 11% this year, while negative net absorption reached 650,000 square feet over the past 12 months, according to Marcus & Millichap’s latest research report. Asking rents decreased by a full percentage point in the first quarter alone and will likely fall at least 6% this year, to just above $14 per square foot.

As for construction, only a million square feet is expected this year, mainly in smaller projects, Marcus & Millichap projects. Last year, 3.6 million square feet was put into service, including the 642,000-square-foot Shops at Wiregrass in south Pasco County.

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