Tampa Bay office buildings replaced dust with more people in 2011, as the vacancy rate dropped to 19 percent, a level not seen since early 2009.
Real estate experts had predicted the rate would drop as businesses hire workers. Vacancy rates typically fall when employment grows.
Although a full economic recovery isn't under way, experts say the decline is good for the region. "The bottom is behind us," said Larry Richey, senior managing director of Cushman & Wakefield in Tampa. "It's amazing how real estate trends with employment."
He expects the numbers to drop even faster this year if the economy keeps improving.
Vacancy rates typically hover between 10 and 20 percent in the bay area, Richey said. Although the rate fell to 11.2 percent in the third quarter of 2006, Richey called that an "unprecedented" demand for space. The current rate of 19 percent mirrors the third quarter of 2003.
The rate in downtown Tampa is 16.5 percent, and downtown St. Petersburg's is 16.8 percent, according to Cushman & Wakefield data.
To lure tenants over the past few years, landlords offered free or reduced rent and shorter leases. That is still happening, but landlords will regain power as the vacancy rates drop lower.
Stephan Whitaker, a research economist at the Federal Reserve Bank of Cleveland, said vacancy rates are good indicators of how the economy is doing in a region.
"Businesses are not renting space for other reasons," he said. "If it is going down, there is a need for space. The market is clearing."
The average rent in the Tampa Bay area is $20.48 per square foot.
Claire Calzon, managing director of office services at Colliers International Tampa Bay, oversees 900,000 square feet of leasing in the Park Tower and Wells Fargo Center in downtown Tampa. She has seen an uptick in law firms expanding and other businesses seeking bigger and nicer spaces.
"Folks are tired of sitting on their hands waiting," she said. "This is a good thing. Landlords are trying to remain cautiously optimistic. We're definitely in a better position today than three years ago."
Unlike places such as Orlando, developers didn't flood the Tampa Bay market with new buildings during the boom, and they have not built many buildings since the real estate market imploded. Currently, about 330,000 square feet of new office space is being built in the bay area.
Miami's vacancy rate is 19.2 percent, Orlando's is 20.2 percent and Jacksonville's is 21.1, according to Cushman & Wakefield.
Office space isn't only filling up here. In 2011, the U.S. office sector recorded the strongest level of demand since 2007, according to Cassidy Turley, a commercial real estate services provider.
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