Q3 2011 | OFFICETAMPA BAY FLORIDAOFFICE RESEARCH REPORT                                                                   ...
RESEARCH REPORT | Q3 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA UNEMPLOYMENT TRENDS                         ...
RESEARCH REPORT | Q3 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDAUPDATE SUBMARKET COMPARISONSSUBMARKET BREAKDO...
RESEARCH REPORT | Q3 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDASUBMARKET MAP                                ...
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Tampa Bay Office Market Report - Q3 2011

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Tampa Bay Office Market Report - Q3 2011

  1. 1. Q3 2011 | OFFICETAMPA BAY FLORIDAOFFICE RESEARCH REPORT Tampa Bay Florida Absorption Turns Positive Year-to-Date EXECUTIVE SUMMARY The Tampa Bay office market showed signs of stabilization in the third quarter as overall net absorption posted the largest quarter-over-quarter gain in over three years. This indicates landlords are beginning to accept the new reality of lower rents and increased concessions. In addition, vacancy rates declined to levels not seen in nearly two years. Of all office space, Class-A posted the largest net absorption increase as tenants capitalized on the opportunity to move into higher quality buildings while not increasing their overall costs. Average asking rental rates fell for the tenthMARKET INDICATORS consecutive quarter, down one half of a percent to $19.60 per square foot. The excess supply of Q3 2011 Q4 2011* office space will likely continue to put downward pressure on rents well into 2012. Despite the positive signs which occurred during the third quarter, significant employment increases in sectors VACANCY traditionally associated with office space will need to occur for a sustained recovery. NET ABSORPTION HIGHLIGHTED TRENDS CONSTRUCTION • Five of six submarkets saw both positive net • Office sectors generating the highest leasing OVERALL absorption and declines in vacancy rates. activity included: healthcare, finance, RENTAL RATE technology, education and defense. • Over 245,000 square feet of Class A office CLASS A RENTAL space was absorbed during the third quarter. • Lending has become looser as of late, RATE • Functional obsolescence began to force however the lack of product in the*Relative to prior period. Note: Arrows landlords to improve buildings in order to marketplace is preventing an increase in salecompare current quarter to the previous maintain occupancy levels and attract new activity.quarter historically adjusted figures. All data in tenants.this report include buildings 10,000 square feet and greater. COMPLETIONS, ABSORPTION AND VACANCY RATES VACANCY RATESOVERALL OFFICE MARKET Completions Net AbsorptionSUMMARY STATISTICS, Q3 2011 Overall Vacancy Class A Vacancy The Tampa Bay office 19% 350 market vacancy rate CURRENT VACANCY RATE: 15.9% declined slightly during Square Feet (1,000s) - Bar Graph 18% 300 the third quarter ending PREV. QTR. VACANCY RATE: 16.2% 17% 250 at 15.9 percent. Class A Vacancy - Trend Line YEAR AGO VACANCY RATE: 16.3% vacancy rates fell from 16% 200 18.1 percent in the 310,196 sf 15% 150 second quarter to 17.2 NET ABSORPTION: percent in the third 14% 100 quarter. UNDER CONSTRUCTION: 0 sf 13% 50 12% 0 CURRENT AVG. ASKING RATE: $19.60/FS 11% -50 PREV. QTR. AVG. ASKING RATE: $19.65/FS 10% -100 YEAR AGO AVG. ASKING RATE: $20.06/FS Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 SOURCE: COSTAR & COLLIERS INTERNATIONAL
  2. 2. RESEARCH REPORT | Q3 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA UNEMPLOYMENT TRENDS VACANCY The Tampa Bay office market vacancy rate quarter-over-quarter increase dating back to Florida Tampa MSA USA fell 30 basis points during the third quarter to the first quarter of 2007. Once again, the 14 15.9 percent. Vacancy rates were highest in Westshore submarket posted the largest the Westshore submarket (17.0 percent) and increase as 72,277 square feet of Class A 12 lowest in Gateway submarket (11.9 percent). space was absorbed. Market-wide, Class A vacancy rates were 10 highest (17.2 percent) with Westshore 8 submarket Class A space posting the highest RENTAL RATES rate (21.3 percent). The overall direct average asking rate during 6 the third quarter fell to $19.60 per square foot full service. Class A asking rates ended the 4 ABSORPTION quarter at $23.10 per square foot full service. Overall net absorption jumped during the third Overall asking rates continue to remain 2 quarter to positive 310,196 square feet, highest in the Westshore submarket at $23.57 0 compared to negative 45,949 square feet per square foot full service. Landlords and Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 during in the previous quarter. Year-to-date brokers continued to report that concessions, net absorption moved into positive territory generous tenant improvement allowances and (196,383 square feet) for only the second one month of free rent per year leased are The Tampa Bay MSA unemployment rate time during the last four years. The North common throughout the market. Indicators posted 11.0% in August 2011, down from the Pinellas submarket gave back the most space, point towards asking rates remaining flat to 12.4% rate posted in August 2010. The State as just over 55,000 square feet were vacated. slightly falling through the remainder of 2011. of Florida rate was 10.9% in August 2011, All other Tampa Bay submarkets posted while the national rate stood at 9.1%. Both Tampa Bay and the State of Florida as a positive absorption figures during the quarter. whole continued to experience unemployment SUMMARY rates well above the national average. The Tampa Bay office market continued to The ability of tenants to move into higher favor the tenant as a large amount of vacant Source: Florida Research & Economic Database quality space was evident as Class A space space remained and unemployment levels experienced 246,170 square feet of positive failed to significantly improve. absorption, which representthe largest TRANSACTION UPDATE SALES ACTIVITY PROPERTY NAME CLASS BUYER NAME SIZE SF SALES PRICE SUBMARKET 125 Indian Rocks Rd N B South River Realty LLC 17,004 $2,835,000 ($166.73/sf ) Mid-Pinellas 3802 Northdale Blvd C Weingarten Realty Investors 32,523 $2,750,000 ($84.56/sf ) NW Tampa 930 Lithia Pinecrest Blvd B Golden City Gymnastics 21,798 $2,446,700 ($112.24/sf ) I-75 Corridor 14914 Winding Creek Ct (3 Properties) C TSI-GSA, LLC 13,247 $1,200,000 ($90.59/sf ) I-75 Corridor LEASING ACTIVITY PROPERTY NAME CLASS TENANT NAME SIZE (SF) LEASE TYPE SUBMARKET MetWest II A PricewaterhouseCoopers 250,000 New Westshore Independence Park I A ConnectWise 50,000 New Westshore 3402 W Martin Luther King Blvd A Optimal Outcomes 36,000 New - Build to Suit Westshore Bayview Pavillion A Universal American Mortgage 31,723 Renewal Gateway 909 N Dale Mabry (Former Borders) A Florida Orthopaedic Institute 27,500 New Westshore 580 Corporate Center A Federal Verification Company, Inc 7,225 New North Pinellas The Pointe A Agile Thought 7,129 New Westshore Wells Fargo Center A LCM Group, Inc. 4,933 New Tampa CBDP. 2 | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA
  3. 3. RESEARCH REPORT | Q3 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDAUPDATE SUBMARKET COMPARISONSSUBMARKET BREAKDOWN Total Net Absorp. New Property Total Inventory Direct Vac. Net Absorp. YTD Under Avg. Direct Asking Rate Full Bldgs. Vac. Current Completions Class S.F. % S.F. Construc. S.F. Service % Qtr. S.F. S.F.TAMPA CBD A 12 4,977,318 14.4% 15.1% 59,353 138,223 0 0 $22.09/fs B,C 61 3,626,381 13.9% 13.9% -1,022 15,229 0 0 $17.32/fs Overall 73 8,603,699 14.2% 14.6% 58,331 153,452 0 0 $20.16/fsWESTSHORE A 40 7,583,378 21.1% 21.3% 72,277 49,128 0 0 $26.13/fs B,C 204 7,958,218 12.6% 12.9% 66,263 48,347 0 0 $19.71/fs Overall 244 15,541,596 16.8% 17.0% 138,540 97,475 0 0 $23.57/fsI-75 CORRIDOR A 44 6,891,536 14.6% 14.9% 64,273 14,607 0 0 $22.17/fs B,C 283 9,280,623 16.7% 17.0% -14,713 -120,878 0 0 $16.87/fs Overall 327 16,172,159 15.8% 16.1% 49,560 -106,271 0 0 $19.20/fsNORTH PINELLAS A 16 1,345,783 18.9% 19.3% -17,098 -29,084 0 0 $19.14/fs B,C 157 3,891,084 15.6% 15.6% -37,994 -12,193 0 0 $16.81/fs Overall 173 5,236,867 16.4% 16.5% -55,092 -41,277 0 0 $17.67/fsGATEWAY A 24 3,085,606 4.9% 5.4% 33,529 79,345 0 0 $21.08/fs B,C 121 4,609,375 15.7% 16.3% 27,630 100,027 0 0 $17.09/fs Overall 145 7,694,981 11.4% 11.9% 61,159 179,372 0 0 $18.25/fsST. PETERSBURG CBD A 9 1,635,246 23.7% 23.9% 26,836 -60,743 0 0 $25.02/fs B,C 55 2,168,183 10.4% 10.4% 99,942 121,832 0 0 $20.00/fs Overall 64 3,803,429 16.1% 16.2% 126,778 61,089 0 0 $22.31/fsTAMPA BAY OVERALL OFFICE MARKET Total Net Absorp. Net New Overall Avg. Class A Avg. Total Inventory Direct Vac. Under Qtr. & Year Bldgs. Vac. Current Absorp. Completions Direct Asking Direct Asking S.F. % Construc. S.F. % Qtr. S.F. YTD S.F. S.F. Rate F.S. Rate F.S. 2011 3Q 1,775 79,962,625 15.6% 15.9% 310,196 196,383 0 0 $19.60/fs $23.10/fs 2011 2Q 1,775 79,962,625 15.9% 16.2% -45,949 -113,813 0 0 $19.65/fs $23.16/fs 2011 1Q 1,775 79,962,625 15.8% 16.2% -67,864 -67,864 0 0 $19.79/fs $23.18/fs 2010 4Q 1,775 79,962,625 15.7% 16.1% 157,740 102,619 0 0 $20.01/fs $23.44/fs 2010 3Q 1,775 79,962,625 15.8% 16.3% 300,557 -55,121 0 0 $20.06/fs $23.61/fs 2010 2Q 1,775 79,962,625 16.1% 16.7% -234,649 -355,678 0 0 $20.10/fs $23.58/fs 2010 1Q 1,774 79,933,591 15.7% 16.3% -121,029 -121,029 0 0 $20.17/fs $23.59/fs 2009 4Q 1,774 79,933,591 15.4% 16.2% -201,004 -1,634,786 136,364 117,034 $20.37/fs $24.16/fs 2009 3Q 1,768 79,774,157 14.9% 15.8% -589,785 -1,433,782 40,000 276,468 $20.64/fs $24.47/fs COLLIERS INTERNATIONAL TAMPA BAY FLORIDA | P. 3
  4. 4. RESEARCH REPORT | Q3 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDASUBMARKET MAP 512 offices in 61 countries on 6 continents United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117 • $1.5 billion in annual revenue • 979 million square feet under management • Over 12,500 professionals TAMPA BAY CITY LEADER: Ryan Kratz Executive Vice President Brokerage | Marketing | Operations Corporate Office 311 Park Place Boulevard Suite 600 Clearwater, FL 33759 Camille Renshaw, CCIM Jeff Tolrud, CCIM Josh Pardue Director of Investment Sales Managing Director, Office Services Senior Investment Associate TEL +1 727 442 7184 camille.renshaw@colliers.com jeff.tolrud@colliers.com josh.pardue@colliers.com www.colliers.com/Camille.Renshaw www.colliers.com/Jeff.Tolrud www.colliers.com/Josh.Pardue Carol Warren, CCIM Jim Allen Mia Jarrell Senior Director Managing Director Managing Director, Office Services Commercial Services Healthcare Services Group mia.jarrell@colliers.com carol.warren@colliers.com jim.allen@colliers.com www.colliers.com/Mia.Jarrell www.colliers.com/Carol.Warren www.colliers.com/Jim.Allen Christopher Leonard, CCIM Jim Stuckey, MCR Mary Clare Codd, CCIM, Director, Commercial Sales Director Corporate Services christopher.leonard@colliers.com jim.stuckey@colliers.com SIOR RESEARCHER: www.colliers.com/ www.colliers.com/Jim.Stuckey Senior Office & Industrial Specialist Christopher.Leonard maryclare.codd@colliers.com www.colliers.com/MaryClare.Codd Matt Dolan Research, GIS & Market Analytics Administrator Claire Calzon Jim Parker, CCIM Melanie Jackson Managing Director Director Commercial Services Senior Associate Office Services Office Services jim.parker@colliers.com melanie.jackson@colliers.com claire.calzon@colliers.com www.colliers.com/Jim.Parker www.colliers.com/MClouelanie. Market: Tampa Bay www.colliers.com/Claire.Calzon Jackson TEL +1 813 221 2290 FAX +1 813 224 9403 Mackenzie Gerlach John Gerlach, CCIM Alan Feldshue EMAIL matt.dolan@colliers.com Investment Specialist Managing Director Office Services Managing Director Office Services mackenzie.gerlach@colliers.com john.gerlach@colliers.com alan.feldshue@colliers.com www.colliers.com/Mackenzie. www.colliers.com/John.Gerlach www.colliers.com/Alan.Feldshue Gerlach Kevin Yeager Senior Associate, Office Services kevin.yeager@colliers.com www.colliers.com/Kevin.Yeager Copyright @ 2011 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, Tampa Bay Florida we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. This report includes owner and non-owner occupied space 10,000 sf and greater. Directional arrows compare current quarter to previous quarter Accelerating success. numbers. Arrows show change when there is a 10 cent or more change in lease rate or 0.5% or more change in vacancy rate. Due to continual updates and refinements in the historical database, some of the data in this report may not match data published in previous reports. Sources: Costar Property and Colliers International Tampa Bay Florida.www.colliers.com/marketname

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