Where houses lead, offices follow
You can't shed 30,000 jobs in a year, suffer a housing meltdown to shame Icarus and absorb a population exodus without it ricocheting destructively into the office market.
Office vacancy in the Tampa Bay area rose by 883,000 square feet in 2008, according to the real estate firm Colliers Arnold.
The dearth of tenants was particularly extreme for the 1.5-million square feet of office buildings completed in 2008. By year's end these newest offices reported vacancies of 55 percent.
Two of the previously healthiest office submarkets, those in Tampa's Westshore and along Interstate 75, suffered disproportionately. That's because much of the new construction was focused there.
Vacancy among Westshore's "Class A" offices soared from 11.2 percent to 17 percent from the end of 2007 to the end of 2008. Interstate 75's Class A vacancy catapulted from 8.5 percent to 16 percent during the same year. Class A offices are typically newer offerings with decent amenties.
Downtown Tampa and St. Petersburg didn't show such dramatic growth in empty offices, if only because vacancies had already reached the mid teens by late 2007.
One bright spot was Gateway, the office complexes close to the Gandy and Howard Frankland bridges in Pinellas County. Its Class A vacancy remained low at 8.7 percent.
"The months ahead will likely be full of challenges for landlords as conditions may continue to worsen before showing improvement due to lackluster tenant demand," Colliers Arnold said in its report.
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Housing market news is the focus of the (Un)Real Estate blog. It offers an inside look at the Florida housing market and real estate news, with a focus on Tampa Bay. Its goal? Simple: To help you keep a roof over your head without losing your shirt.
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