Tampa Industrial Market Improving

Vacancies are averaging 8.4%, down from 8.9% in 3Q 2002 and 9.2% in 1Q and 2Q 2002. Total net absorption for last year, however, was a negative 702,723 sf; in 4Q, a negative 430,291 sf.

Average asking rents in the 132.6 million-sf warehouse/distribution sector are $4.51 per sf; and $6.79 per sf in the 15.4 -million-sf R&D Flex category.

"Although the year-to-date absorption was negative, more than half of the industrial submarkets posted positive net absorption in the fourth quarter," says Jeffrey Sweeney, Grubb & Ellis' regional managing director. He calls fourth-quarter absorption activity "another encouraging sign that the market is slowly but surely moving in the right direction."

The 13-million-sf Northwest Polk County submarket had the highest vacancy level at 19.4% but also showed a positive net absorption of 122,700 sf for the year. Most of the new construction, totaling one million sf, is centered in this submarket.

Among the projects are Minute Maid Inc.'s 620,000-sf processing plant and distribution center in Auburndale, FL, scheduled to open this month; the 200,000-sf addition to Firstpark @ Bridgewater is expected to be completed in May; and the 275,000-sf addition at the Park 27 distribution center is due for completion in April.

The only other new construction is 182,850 sf in the 17.6-milion-sf Westshore/Airport submarket; 74,000 sf in South Pinellas; and 10,000 sf in North Pinellas.

"The general consensus is that the worst is past and that Tampa Bay's industrial market is now poised to rebound in 2003," Sweeney says.

Among the largest submarkets, the 42 million-sf East Side has a vacancy level of 11% and is showing 4.64 million sf of available space at average asking rents of $4.16 per sf for warehouse/distribution and $6.97 per sf for R&D/flex. East Side posted a 4Q positive net absorption of 197,648 but had a negative 408,916 sf for the year.

South Pinellas, the second largest submarket at 37.9 million sf, logged one of the area's lowest vacancy levels at 5.8% and had positive absorption of 115,701 sf in 4Q and 83,921 sf for all of 2002.