Tampa Bay office vacancy rates at 27-year high

Tampa Bay office buildings collected dust at the end of 2010 as vacancy rates hit a 27-year high.

Nearly 24 percent of available office space — 13.7 million square feet — stood empty in six bay area counties, according to the Maddux Report.

The combined vacancies would total more than all the multi-tenant office space in Pinellas County, the report said. It's the equivalent of almost 18 empty Bank of America Plaza buildings, the largest office complex in downtown Tampa.

The figure rose steadily every year from 12.2 percent in 2006 to its current rate.

"This didn't just appear," said Carlen Maddux, publisher of the report. "It's been building over time."

Since 2008, tenants leaving exceeded those moving in by 2.77 million square feet. Nearly two-thirds of the exodus occurred in Hillsborough County.

Hillsborough's vacancy rate is at its highest since 1986. The average asking rent at the end of 2010 was $21.21 per square foot per year. The Pinellas vacancy rate is 27.9 percent, the highest in 18 years, with average rents at $17.86 per square foot, Maddux said.

The vacancy rates will decrease as more jobs are created, commercial real estate experts said. To lure tenants over the past few years, landlords have offered concessions for free or reduced rent and shorter leases.

Two experts said the market is already improving.

"We had a substantial recovery in 2010," said Larry Richey, senior managing director of Cushman & Wakefield in Tampa. "We think the worst is behind us. "

Richey said that bay area vacancy rates typically range between 10 percent and 20 percent: "If the rate was 10 percent, it would be a landlord's market."

The national firm doesn't include data in its reports from several of the counties listed in the Maddux report. Cushman & Wakefield pegged the combined vacancy rate for Hillsborough and Pinellas counties at the end of 2010 at 20.5 percent.

"We're not far away from the all-time highs," Richey said.

The average asking rents have dropped slightly this year to $20.66 per square foot in Tampa Bay, according to Cushman & Wakefield.

Some office buildings are thriving.

The Bank of America Plaza in downtown Tampa with 762,062 square feet has an overall vacancy of just 7.3 percent, according to Cushman & Wakefield figures.

The 100 North Tampa building, a 552,080-square-foot skyscraper and the former Regions Bank building, is only 2.5 percent vacant.

But Rivergate Tower, the 515,965-square-foot tower sometimes called "the Beer Can" building on N Ashley Street, is 37.7 percent vacant.

Paula Clair Smith, a broker-associate at Osprey Real Estate Services in St. Petersburg, said inquiries for office space in prime buildings are increasing this year.

She said: "If that's any indication, it's a good sign."

Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him on Twitter at twitter.com/markapuente.