"Competition for office tenants between cities in the Tampa Bayarea is fierce and the City of St. Petersburg is vying for thewinning edge," says Steven M. Ekovich, Marcus & Millichap'sFlorida regional manager. "St. Petersburg is successfully luringoffice employers to the area with attractive amenities."

Among the city's benefits are waterfront property, sportsactivities, Downtown living space and a pedestrian-friendlyenvironment. "Many businesses have been further enticed by askingrents that are 13% less than in Tampa," Ekovich notes. "As aresult, St. Petersburg boasts vacancy rates 50% lower than Tampa orClearwater."

Investors are "most interested in properties near theamenity-rich BayWalk area and the Gateway region, which is home tomore than 30,000 workers and includes companies such as RaymondJames and the Home Shopping Network," the broker says. Ekovichadds, "We expect increased upward pressure on sales prices in St.Petersburg as investors continue to target the area."