TAMPA, FL-Highwoods Properties plans to start work on a 209,000-sf, multi-tenant office building in the Westshore submarket this month. The Raleigh, NC-based REIT tells GlobeSt.com it expects the $41-million project to take a year from start to finish.

Highwoods Bay Center I, which will feature structured parking, will compromise two seven-story buildings rising on Bay Center Drive. It will join Highwoods’ existing portfolio in the submarket. All total, the REIT owns or manages 12 office buildings, encompassing 1.7 million sf, in Westshore.

“The Tampa market is posting solid growth as existing companies have expanded, new firms have moved to the area and market rents have increased,” explains Ed Fritsch, president and CEO of Highwoods Properties. “The area’s employment growth has exceeded the national average for the past five years, averaging 4% in 2005. The Westshore submarket, in particular, is one of the most popular areas for businesses to locate in Tampa and commands the highest rental rates due to its central proximity to the airport and Downtown.”

For the first quarter 2006, the class A office vacancy rate for Tampa Bay stood at 9% with 644,995 sf absorbed in the quarter, according to Colliers Arnold’s office market report for Tampa Bay. The absorption figure included 120,726 sf of newly completed space, it adds. The class A direct average lease rate was $21.04 per sf in the first quarter, the report adds.

For the Westshore submarket specifically, Colliers Arnold reports the class A vacancy came in at 7.9% for the first quarter, with 61,447-sf absorption. The overall direct lease rate was $20.85 and the class A direct lease rate was $24.31, the report adds.

Highwoods Properties has been active in the Southeast. Healthways, Inc. selected the REIT to build a 255,000-sf corporate headquarters in the Cool Springs submarket of Nashville, as GlobeSt.com reported on May 5. In addition, Highwoods plans a year’s end groundbreaking of Capital Plaza III in Orlando. The 15-story building will contain 180,000 sf of class A office space, as GlobeSt.com previously reported.

Fritsch reports that since the inception of Highwoods’ three-year Strategic Management Plan on Jan. 1, 2005, “the company has announced $313 million of development starts that are close to 50% preleased. We had originally targeted commencing between $200 million and $300 million of development during this three-year timeframe. The upper end of this range has now been revised to $400 million.”

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