TAMPA, FL-Tampa Bay's 21-million-sf flex space market remains "very healthy" despite a lackluster finish in 2005, according to a new market study by the Tampa office of Colliers Arnold. Of the total 808,780 sf of new supply, only 372,038 sf or about 46% is still available. Flex buildings are selling at an average $76 per sf, the highest price in years. The 808,780 sf of new product is the largest delivered to the area in four years.

Russ Sampson, vice president and brokerage director at Colliers Arnold, tells GlobeSt.com his firm "projects positive momentum for the rest of 2006." He says the market is "being driven by the growth in the job market."

Rents are rising, keeping pace with strong demand. Average direct gross asking flex rents are at $9.26 per sf, up from $8.45 per sf at year-end 2004, the study notes. Manufacturing rents average $4.38 per sf. Wholesale and distribution space is leasing for an average $4.73 per sf.

Overall vacancy, however, is up to 12.9%, resulting largely from Eckerd Drug Stores vacating a 409,882 sf building in Largo. "Excluding the vacating of the Eckerd headquarters, absorption was a very healthy 274,911 sf in the fourth quarter, which demonstrates the strength of the market," Sampson says. Overall absorption for all of 2005 was 255,428 sf versus 192,842 sf in the preceding year.

By submarket, the 6.3-million-sf Gateway/Mid Pinellas area--the largest in Tampa Bay--is at a near record high vacancy of 17.9%. Absorption at year end was a negative 365,238 sf, directly due to Eckerd shutting down its operations. Not counting Eckerd's vacant 409,882 sf, absorption was a positive 44,644 sf, according to the Colliers Arnold data.

The second largest flex submarket in Tampa Bay, the 5.6-million-sf East Side Tampa area, also showed a high vacancy of 14.3% at year-end 2005. Three flex buildings totaling 265,600 sf surfaced in the last quarter of 2005 and were responsible for the vacancy hike, Sampson says. Of the total new construction, 202,509 sf remains to be leased.

For investors, the second half of 2005 was "very active," Sampson notes. Eight major projects traded hands at an average price of $76 per sf. This compares with 10 projects that sold in the first half of 2005 for an average $71 per sf and five projects that sold in the last six months of 2004 for an average $61 per sf.