Tampa Office Market Improves but Vacancy Still at 17%

"The best news is absorption has increased to 158,200 sf which is a pace much greater than achieved in 2002," notes Melanie Garlock, marketing and research manager at Grubb & Ellis. "With three quarters of the year under our belt, we are starting to see a slight tightening in the amount of office space available for lease in the Tampa Bay market."

Garlock puts that overall amount of vacant space at 8.5 million sf. Sub-lease space in the central business district totals 118,728 sf; in the suburbs, 454,633 sf. Class A sublease space tops the list with 105,583 sf in the CBD and 224,667 sf in the suburbs.

Russ Sampson, executive vice president and director of brokerage at Colliers Arnold, is as confident as Garlock in Tampa's future office leasing prospects. "Positive influences on the Florida economy include Florida's continued lead in the national job market in employment growth," Sampson says. He cites Florida's unemployment rate of 4.7% and the national average rate of 5.7%. Sampson says Tampa is coming in at 3.8%.

The Colliers Arnold executive puts the overall average office lease rates for the Tampa Bay area at $17.97 per sf. Grubb & Ellis shows class A rents at an average $20.50 per sf and class B at $16.78 per sf.

Construction activity is minimal, according to the Grubb & Ellis statistics with only 829,728 sf under construction in 17 submarkets. Of those submarkets, the nearly 2.3-million-sf St. Petersburg area and the 868,073-sf South Tampa sector show the strongest occupancy. St. Petersburg's vacancy level is 7.5%; South Tampa, 9.6%.