Make us your home page

Tampa Bay office buildings land more tenants, indicating rebound

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.

Reach Mark Puente at Follow him on Twitter at

Tampa Bay office buildings land more tenants, indicating rebound 01/05/12 [Last modified: Thursday, January 5, 2012 10:40pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Walmart expands grocery delivery service to Tampa


    TAMPA — Walmart is expanding its grocery delivery service to Tampa, the company announced Monday. Five locations will offer delivery for online grocery orders.

    Walmart is expanding its grocery delivery to Tampa, the company announced Monday. | [Times file photo]
  2. Marina at Hudson Beach poised to become 24-unit condominium-hotel


    HUDSON — One of the mainstay businesses at Hudson Beach is poised for redevelopment into a 24-unit condominium-hotel.

    The owners of Skeleton Key Marina in Hudson have filed preliminary plans with Pasco County to redevelop the site into a 24-unit condominium-hotel.
  3. Have your say Tampa Bay on the region's future transit options

    Mass Transit

    TAMPA — It's time, yet again, for Tampa Bay residents to tell officials what kind of transit options they want for their region.

    The Cross-Bay Ferry docks at the Tampa Convention Center on its maiden voyage on Nov. 1, 2016. A regional premium transit study will determine whether a ferry, or other options such as express buses or light rail, would be a good addition to Tampa Bay. [SCOTT KEELER  |  Times]
  4. SOCom seeks civilian drone pilots to develop new technology through ThunderDrone


    TAMPA — For the last three years, Nicole Abbett has been using drones as part of her photography business, with clients like the city of Tampa and construction companies.

    Josh Newby, 31, Palm Harbor, of Tampa Drones fly's a drone in England Brothers park, Pinellas Park, 8/25/16. As drone popularity increases as a hobby and business, local governments are navigating a legal grey area- where, when, and how should drone flights be allowed?
  5. New apartment complex delivers unique floor plans


    RIVERVIEW — A new luxury apartment community has opened in the Progress Village area touting itself as a distinct living option just 10 miles from downtown Tampa.

    Alta at Magnolia Park dubs its new apartment community, that opened earlier this year in Riverview, a modern and distinct option for living just 10 miles from downtown Tampa.