TAMPA, FL-The Tampa Bay office market ended 2011 on several positive notes. Fourth quarter absorption was close to 500,000 square feet, bringing 2011 annual absorption to more than one million square feet, according to CBRE.

For the first time since 2008, vacancy is less than 20%, yet average asking lease rates have dropped below $20 per square foot—rates not seen since 2006. At the core of the Tampa’s growth is the Westshore submarket, where vacancy stands at 17.2%. That’s down 6% since this time last year.

GlobeSt.com caught up with Dale Peterson, an investment property specialist at CBRE, to talk about what 2012 has in store for Tampa’s office investment market.

GlobeSt.com: How did Tampa’s office investment market fare in 2011?

Peterson: Tampa saw very limited sales activity. We had approximately $275 million worth of sales transactions that occurred in Hillsborough County during 2011. Really, we capped the year off with the SunTrust Financial Centre deal on December 15.

GlobeSt.com: What do you expect in 2012?

Peterson: As these assets book and the market is able to verify transactions, there’s going to be some clarity in the market from a trading range standpoint, in terms of cap rates and price per square foot. It also lets the ownership group within the market know that if they are contemplating selling the asset this might be a good time to explore those options.

GlobeSt.com: So you expect more owners to come to the market.

Peterson: Yes, the previous 36 months has not been an environment that was conducive to yielding any type of meaningful value. A lot of people have chosen to wait on the sidelines until market conditions have gotten better. The debt market is an incredible accelerant to attract risk-based capital to real estate in today’s environment with historically low interest rates.

GlobeSt.com: What’s your outlook for the first quarter of 2012, then?

Peterson: We will continue to see an uptick in activity with deals that are trading. There’s a number of things that are out there now that will trade in near term that will give the investor market certain other benchmarks to hang their hat on and make them feel comfortable that it’s OK to come back to the market.

GlobeSt.com: What’s the biggest potential challenge?

Peterson: The number one driving factor is jobs. What people are focused on is the unemployment rate and where does that unemployment rate stand compared to where we were 12 months ago or 36 months ago. We’ve come down. The unemployment rate as it stands at the end of 2011 for the Tampa Bay MSA was 10.3, which is slightly above Florida. Florida was at 9.8, which is slightly above the overall for the US, which was 8.2 percent.

But people are focused on jobs because it has a direct correlation to tenant demand and space absorption. So people are still going to be very tempered on how they view Tampa and there’s a segment of the institutional audience that won’t come to Tampa until they get a better feel that the jobs are starting to come back to the market and we’ve recovered from the downturn in the economy and from the residential market.

People are going to be very closely tune to follow jobs and growth, again a lot of things are still in play relative to things that we are seeing in Europe. The presidential election is coming up. So there are going to be some factors that could end up having positive or negative effects on the market going forward. But it will be a slow, gradual recovery.

GlobeSt.com: Where do you expect investors to focus their money?

Peterson: Westshore obviously is our preeminent market in our Tampa Bay MSA. It’s the largest suburban submarket in the state of Florida and the number one target for investors that are in the market and also for new equity coming into the market. Hands down it’s the number one choice of where people want to locate and invest risk-based capital.