Average asking rents have increased to $17.97 per sf overall; class A rent is at $20.19 per sf. Of the total 380,500 sf under construction, 277,000 sf is class A product. The most activity in the second quarter was seen in Tampa Bay's two largest office submarkets, Westshore (13.8 million sf) and the I-75 Corridor (12 million sf).
MetLife Inc. caused the biggest stir, relocating from its 21-acre Westshore site to the I-75 Corridor where the insurance carrier purchased two adjacent buildings, Highwoods II and IV, totaling 240,000 from Highwoods Properties Inc. of Raleigh, NC for $24.5 million or $102 per sf. Met plans to move in during October.
"Duke Realty Corp. is so confident in the strength of this [I-75 Corridor] submarket that they plan to begin construction [this summer] on two speculative office buildings," Colliers Arnold executive vice president Russ Sampson says in his report. Highland Oaks III on Highland Manor Drive is 97,000 sf; Regency III on Lake Kathy Drive is 86,000 sf.
MetLife's former 21-acre site is expected to be redeveloped as a 900,000-sf campus of office, retail, and multifamily product, Sampson says. Also planned in the Westshore submarket is Highwoods Bay Center comprising two class A, seven-story office buildings, each consisting of 208,606 sf.
In neighboring St. Petersburg, the 173,609-sf Downtown Bay View Tower is scheduled to be demolished by year end to make ways for the Peninsula, a mixed-use venture that will include 50,000 sf of office condos, ground-floor retail, a parking garage and a 35-story residential condominium tower.
The 3.59-million-sf St. Petersburg office market has an overall vacancy of 7.5% and a class A vacancy of 8.2%. The overall lease rate is up to $17.94 per sf; average class A rents are also up to $18.54 per sf.
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