What They're Saying: Avison Young First Quarter 2018
“Economic fundamentals in Tampa Bay remain solid as indicated by the sustained decline in the unemployment rate, which stood at 3.6% as of February 2018 — a marked 100-basis point (bps) decrease from the previous year.”
“Within Tampa’s industrial market, healthy leasing activity is occurring, particularly in the East Side and Lakeland submarkets, and the vacancy rate has held steady, growing by only 42 bps even as 1.1 million (square feet) of new industrial space delivered during the first quarter.”
“Asking (office) rents have largely held steady over the last quarter, with slight growth in Class A rents in the urban core and Westshore areas. The overall vacancy rate has fallen 190 bps over the trailing 12-month period with a slight drop in sublet vacancy, and the Class A vacancy rate remains just under 8%.”
“Although a lack of large blocks of quality Class A space persists, particularly in Westshore where the Class A direct vacancy rate is hovering just below 6%, additional new construction (is) expected to commence during 2018 will eventually alleviate some of that pent-up demand.”
Percentage of vacant industrial space in the Tampa Bay area at the close of the first quarter. Average rents as of march 31 were $5.90 per square foot, on a triple net basis.
Percentage of vacant office space in the Tampa Bay area, comprising Hillsborough and Pinellas counties, at the end of the first quarter of 2018. Average rents during the period were $27.49 per square foot, on a full-service basis.
Amount of industrial space, measured in square feet, that was absorbed or removed from the market through leasing activity during the first three months of the year.
Amount of the largest office sale in the Tampa area during the first quarter. Starwood Capital Group’s purchase of the two-building Urban Centre complex in Westshore sold for $260 per square foot, or at a 7% capitalization rate.
Capitalization rate on the largest industrial sale in the Tampa area during the first quarter, a $59.6 million deal for Brennan Investment Group’s 605,412-square-foot distribution center at Centerstate Logistics Center, in Lakeland. The building, fully occupied by Quaker Oats, was purchased by Griffin Capital Essential Asset REIT.
Amount of office space, in square feet, removed from the market during the quarter through positive net absorption.
Amount of office space pre-leased by PriceWaterhouseCoopers in the 267,754-square-foot MetWest III office tower, now under construction in the Westshore submarket of Tampa. Owner Metropolitan Life expects to deliver the building, the first speculative office development in the region since 2013, next year.
Amount of new office space Bromley Cos. intends to build in its planned Midtown development in Tampa by 2021. The $500 million development also will contain retail space and multifamily residences.
Total industrial real estate sales in the Tampa area for the 12-month period ended March 31.
Total amount of industrial space, in square feet, now under construction in the Tampa area, including portions of the Interstate 4 corridor. All of the work is occurring in Lakeland and on the East Side of Tampa.
Number of speculative office projects expected to be under construction in the Westshore area of Tampa by the end of 2018, a group that includes MetWest III.
Total office investment sales in the Tampa area for the 12-month period ended March 31, a figure that includes the Urban Centre deal.
Source: Avison Young