For the second quarter, the vacancy rate was 8.8%, down from 10.1% in the first quarter. Average direct lease rates rose from $21.19 per sf in the first quarter to $21.49 per sf in the second quarter. There was 243,494 sf of positive absorption during the quarter, the report states. Among economic factors buoying the market are new job creation and a low unemployment rate, which was 2.6% for the Sarasota/Manatee area. The national unemployment rate is 4.6%, the report states.

Christopher Leonard, of Colliers Arnold, tells GlobeSt.com that the strength of the market can be attributed to the desirability of the area and the lack of inventory. When companies are looking for space they may have two or three alternatives, whereas in other parts of Florida they may have more than 10, he says. "This market is a very dynamic market with a very good quality of life," Christopher Leonard, of Colliers Arnold tells GlobeSt.com. "It's a very desirable area and there are not a lot of leasing alternatives."

In addition to increased demand, a factor that's driving the higher rental rates is new construction. Three office buildings were completed in this submarket during the second quarter totaling 99,200 sf. There are 15 buildings under construction totaling 386,799 sf. Of this total, 42% has already been sold or leased while under construction. One of the largest buildings under construction is the 79,885-sf Interstate Commerce Center building at 6001 Lake Osprey Dr. "You have new product being built and, due to the cost of construction and land costs, it doesn't make sense for owners to lease that space at the current rental rates," Leonard says.