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Q4 2011 | OFFICETAMPA BAY FLORIDAOFFICE RESEARCH REPORT                                                                   ...
RESEARCH REPORT | Q4 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA UNEMPLOYMENT TRENDS                         ...
RESEARCH REPORT | Q4 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDAUPDATE SUBMARKET COMPARISONSSUBMARKET BREAKDO...
RESEARCH REPORT | Q4 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDASUBMARKET MAP                                ...
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Tampa Bay Office Market Report - Q4 2011

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Transcript of "Tampa Bay Office Market Report - Q4 2011"

  1. 1. Q4 2011 | OFFICETAMPA BAY FLORIDAOFFICE RESEARCH REPORT Tampa Bay Florida Market Poised for Steady Advance EXECUTIVE SUMMARY The Tampa Bay office market showed signs of improvement with 354,487 square feet of inventory being absorbed marketwide in the fourth quarter of 2011. Year-end numbers for job growth have supported a cautious but optimistic outlook, leading to more inbound office users considering Tampa Bay. As vacancy rates continue to decline, asking rental rates are beginning to level off. Landlords are standing firm, resulting in tighter concession packages in buildings with limited vacancies. Certain Class B portions of the market continue to experience higher than normal vacancy rates, however as the Class A office buildings continue to fill, tenants will look to the Class B locations as a cost efficient alternative.MARKET INDICATORS Q4 2011 Q1 2012* The investment sales sector is showing signs of a slow but steady uptick, with a number of investors taking a second look at Tampa Bay as a promising investment market. Investor interest VACANCY is projected for continued growth during the transitional year of 2012. NET ABSORPTION HIGHLIGHTED TRENDS CONSTRUCTION • Four of six Tampa Bay submarkets showed • December 2011 unemployment in Tampa Bay positive net absorption this quarter, including fell to 10.0 percent, a respectable decline OVERALL RENTAL RATE Westshore, Gateway, Tampa CBD, and St. from 12.2 percent in December of 2010. Petersburg CBD. CLASS A RENTAL • Tampa Bay industry sectors with increased RATE • 250,787 square feet of Class A office space job growth included: applied medicine, high were absorbed representing a 83,493 square tech electronics and instruments, financial/*Relative to prior period. Arrows compare foot jump over the previous quarter.current quarter to the previous quarter historically data services, marine/environmentaladjusted figures. All data in this report includes • Overall asking rental rates were nearly activities and law firms.buildings 10,000 square feet and greater. steady; fourth quarter rates averaged $19.60 full service. COMPLETIONS, ABSORPTION AND VACANCY RATESOVERALL OFFICE MARKETSUMMARY STATISTICS, Q4 2011 Completions Net Absorption VACANCY RATES Overall Vacancy Class A Vacancy Tampa Bay’s office CURRENT VACANCY RATE: 15.5% 20% 400 vacancy continued to PREV. QTR. VACANCY RATE: 16.0% 18% 350 decline to 15.5 percent Square Feet (1,000s) - Bar Graph YEAR AGO VACANCY RATE: 16.2% 16% 300 in the fourth quarter of Vacancy - Trend Line 2011. Class A vacancy 14% 250 fell to 17.0 percent, as NET ABSORPTION: 354,487 sf 12% 200 landlords continued to 10% 150 make concessions, UNDER CONSTRUCTION: 250,000 sf allowing tenants to 8% 100 upgrade to Class A 6% 50 space. CURRENT AVG. ASKING RATE: $19.60/FS 4% 0 PREV. QTR. AVG. ASKING RATE: $19.64/FS 2% -50 YEAR AGO AVG. ASKING RATE: $19.95/FS 0% -100 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 SOURCE: COSTAR & COLLIERS INTERNATIONAL
  2. 2. RESEARCH REPORT | Q4 2011 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA UNEMPLOYMENT TRENDS VACANCY RENTAL RATES Tampa Bay’s office vacancy dropped 0.5 Direct overall asking rates reached $19.60 in Florida Tampa MSA USA percent during the fourth quarter, ending the the last quarter of 2011, declining just $0.04 14 year at 15.5 percent. The highest vacancy from the previous quarter. Overall Class A rates continued to reside within the I-75 asking rates ended the quarter at $23.29 per 12 Corridor at 17.0 percent, and North Pinellas at square foot, down $0.06 from the third quarter. 16.9 percent. Lowest total vacancy rates were The Westshore submarket continued to 10 attributed to the Gateway submarket for the command the highest rental rates at an average 8 second consecutive quarter of the year, at a of $23.44 per square foot full service, while rate of 11.7 percent. Approximately 12.4 million North Pinellas remained the most affordable 6 square feet of inventory is currently vacant submarket at $17.46 per square foot. Tightening within the Tampa Bay market. market conditions and landlord debt obligations 4 are expected to help hold rental rates steady 2 during 2012. We will still see concessions in ABSORPTION the form of free rent and above average tenant 0 Overall net absorption increased steadily improvement Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 during the fourth quarter to positive 354,487 square feet, up 53,009 square feet over the INVESTMENT SALE ACTIVITY previous quarter. Year-to-date, net absorption Significant investment sales during the fourth Tampa Bay’s unemployment rate posted continued to trend upward, nearly tripling from quarter of 2011 included The Brookdale Group’s 10.0% in December 2011, down from the the third quarter as it reached positive 537,560 $84.5 million purchase of SunTrust Financial 12.2% rate posted in December 2010. The square feet. The I-75 Corridor vacated 51,773 State of Florida rate was 9.7% in December Centre, a 533,908 square foot tower office square feet of office space, while North Pinellas building in the Tampa CBD. Another notable 2011, while the national rate stood at 8.3%. Local unemployment is falling, however was the only other submarket that experienced transaction was the $46.9 million sale of The Tampa Bay’s unemployment rate continues negative absorption at the rate of 9,975 square Pointe, a 252,000 square foot waterfront asset to remain above both state and the national feet overall. The Westshore submarket located in the Westshore submarket. The levels. absorption figure stood out with a net of landmark property was purchased by Parkway 214,254 square feet of space added to the Properties, as they continue to increase their Source: Florida Research & Economic Database market, of which 185,213 square feet was Class market presence with the purchase of Class A A space again demonstrating the move to product. quality. TRANSACTION UPDATE SALES ACTIVITY PROPERTY NAME CLASS BUYER NAME SIZE SF SALES PRICE SUBMARKET SunTrust Financial Centre A Brookdale Group 533,908 $84,500,000 ($158.27/sf) Tampa CBD The Pointe A Parkway Properties 252,000 $46,900,000 ($185.86/sf) Westshore Sabal Pavillion 1 A CBRE Realty Trust 120,500 $21,368,000 ($177.33/sf) East Tampa Doctor’s Medical Plaza B HCA Health Services of Florida, Inc. 36,946 $4,759,817 ($128.83/sf) South Pinellas LEASING ACTIVITY PROPERTY NAME CLASS TENANT NAME SIZE (SF) LEASE TYPE SUBMARKET Two Prestige Place* A AmeriLife Group 69,540 New North Pinellas Bayview Pavillion* A Universal Americal Mortgage Co. 31,723 Renewal North Pinellas Carrollwood Crossings B JC III and Associates 22,000 New NW Tampa Tower Place* A John Hancock Life Insurance Agency 8,071 New Westshore Pinebrook Business Center* B Healthesystems LLC 5,549 Renewal East Tampa Park Tower* A Grow Financial 2,460 New Tampa CBD*Colliers International DealP. 2 | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA
  3. 3. RESEARCH REPORT | Q4 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 4,784,128 15.0% 15.8% -4,272 133,951 0 0 $22.63/fs B,C 62 3,641,381 12.4% 12.4% 58,230 73,459 0 0 $17.42/fs Overall 74 8,425,509 13.9% 14.3% 53,958 207,410 0 0 $20.86/fsWESTSHORE A 40 7,604,811 18.5% 18.8% 185,213 236,098 0 250,000 $26.20/fs B,C 202 7,934,611 12.2% 12.4% 29,041 74,899 0 0 $19.25/fs Overall 242 15,539,422 15.3% 15.5% 214,254 310,997 0 250,000 $23.44/fsI-75 CORRIDOR A 44 6,882,959 14.7% 15.0% -7,616 6,991 0 0 $21.85/fs B,C 281 9,294,899 18.1% 18.4% -44,157 -172,259 0 0 $17.23/fs Overall 325 16,177,858 16.6% 17.0% -51,773 -165,268 0 0 $19.18/fsNORTH PINELLAS A 15 1,319,383 18.9% 19.4% 4,785 -24,299 0 0 $18.97/fs B,C 156 3,877,007 16.0% 16.0% -14,760 -26,953 0 0 $16.63/fs Overall 171 5,196,390 16.8% 16.9% -9,975 -51,252 0 0 $17.46/fsGATEWAY A 24 3,077,170 3.8% 4.2% 35,441 114,786 0 0 $21.18/fs B,C 120 4,592,643 16.6% 16.6% -14,942 85,085 0 0 $16.82/fs Overall 144 7,669,813 11.4% 11.7% 20,499 199,871 0 0 $17.85/fsST. PETERSBURG CBD A 9 1,635,246 22.2% 22.4% 25,015 -35,728 0 0 $22.59/fs B,C 55 2,168,183 9.3% 9.3% 23,792 145,624 0 0 $20.02/fs Overall 64 3,803,429 14.8% 14.9% 48,807 109,896 0 0 $21.20/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 4Q 1,769 79,904,594 15.2% 15.5% 354,487 537,560 0 250,000 $19.60/fs $23.29/fs 2011 3Q 1,769 79,904,594 15.7% 16.0% 301,478 183,073 0 0 $19.64/fs $23.35/fs 2011 2Q 1,769 79,904,594 16.0% 16.4% -46,632 -118,405 0 0 $19.60/fs $23.16/fs 2011 1Q 1,769 79,904,594 15.9% 16.3% -71,773 -71,773 0 0 $19.74/fs $23.18/fs 2010 4Q 1,769 79,904,594 15.8% 16.2% 160,132 100,419 0 0 $19.95/fs $23.44/fs 2010 3Q 1,769 79,904,594 15.9% 16.4% 300,325 -59,713 0 0 $20.01/fs $23.61/fs 2010 2Q 1,769 79,904,594 16.2% 16.8% -237,676 -360,038 29,034 0 $20.04/fs $23.58/fs 2010 1Q 1,768 79,875,560 15.8% 16.5% -122,362 -122,362 0 117,034 $20.11/fs $23.59/fs 2009 4Q 1,768 79,875,560 15.5% 16.3% -201,672 -1,613,917 136,364 117,034 $20.30/fs $24.16/fs COLLIERS INTERNATIONAL TAMPA BAY FLORIDA | P. 3
  4. 4. RESEARCH REPORT | Q4 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 John Gerlach, CCIM TEL +1 727 442 7184 Alan Feldshue Jeff Tolrud, CCIM Managing Director Office Services Director, Office Services Managing Director Investment alan.feldshue@colliers.com jeff.tolrud@colliers.com Services www.colliers.com/Alan.Feldshue www.colliers.com/Jeff.Tolrud john.gerlach@colliers.com www.colliers.com/John.Gerlach 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, RESEARCH CONTACT: Director, Commercial Sales Director Corporate Services christopher.leonard@colliers.com jim.stuckey@colliers.com SIOR www.colliers.com/ www.colliers.com/Jim.Stuckey Senior Office & Industrial Specialist Matt Dolan Christopher.Leonard maryclare.codd@colliers.com Research, GIS & Market Analytics www.colliers.com/MaryClare.Codd Administrator Claire Calzon Jim Parker, CCIM Melanie Jackson Managing Director Director Commercial Services Senior Associate Office Services Market: Tampa Bay Office Services jim.parker@colliers.com melanie.jackson@colliers.com claire.calzon@colliers.com www.colliers.com/Jim.Parker www.colliers.com/MClouelanie. TEL +1 813 221 2290 www.colliers.com/Claire.Calzon Jackson FAX +1 813 224 9403 EMAIL matt.dolan@colliers.com Mackenzie Gerlach Joanne LeBlanc Kevin Yeager Associate, Investment Services Office Specialist Senior Associate, Office Services mackenzie.gerlach@colliers.com joanne.leblanc@colliers.com kevin.yeager@colliers.com www.colliers.com/ www.colliers.com/ www.colliers.com/Kevin.Yeager Mackenzie.Gerlach Joanne.LeBlanc Copyright @ 2012 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting Tampa Bay Florida 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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