TAMPA, FL—After stabilizing in Tampa, the Bay area’s office market is expected to see improvements in 2012. Leasing activity picked up slightly in 2011 and the market saw positive absorption. The vacancy rate wound up at 19.2% in 2011, according to Grubb & Ellis, and is forecast to dip to 18.6% in 2012.

Indeed, the improving climate leads Grubb & Ellis to predict a substantial recovery in the foreseeable future. For example, the new construction pipeline was empty in 2011 but 115,000 square feet is coming online in 2012, according to the firm’s research. Still, that shouldn’t negatively impact the market since no major tenants are expected to downsize or exit the market.

“Companies are using space more efficiently,” Katie Trott, vice president of CNL Commercial Real Estate’s Tampa office, tells GlobeSt.com. “Hoteling cubicles, fewer actual offices, smaller IT rooms and higher parking ratios allow tenants to take less space, which can really affect the bottom line.”

One bright spot Grubb pointed to is the education and health services industry. The firm’s latest report predicts those sectors will drive most of the demand for space as the financial services sectors continue struggling.

Distressed and REO properties are also a trend in Tampa’s office market, and may continue to be in 2012. Grubb predicts more than half of the commercial mortgages maturing in 2012 could fail to secure a refi. That translates to a rush of investors looking for value-add opportunities.

“The challenges facing the market in 2012 are much the same as those that troubled the
market in 2011,” Grubb & Ellis concludes. “Maturing loans, as mentioned, are expected to create an influx of available properties that may also put downward pressure on pricing. The struggling global markets and a possible reprise of last year’s debt ceiling debate may affect business decisions throughout the year.”