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Business Observer Friday, Aug. 7, 2015 7 years ago

Commercial real estate

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Benderson readying SRQ Commerce Park II; Tampa office rents poised to crack threshold
by: Kevin McQuaid Commercial Real Estate Editor

Benderson readying SRQ Commerce Park II
Boosted by rising occupancy at one of its Manatee County industrial projects, Benderson Development Co. is preparing to start construction on SRQ Commerce Park II in the weeks ahead.

The 70,000-square-foot building, valued at roughly $3 million, is slated for completion early next year, says Larry Fineberg, Benderson's executive director of industrial, office and warehouse properties.

The new building, with a 28-foot clear ceiling height, will be accompanied by a roughly 20,000-square-foot “flex” building comprising industrial and office space.

Fineberg expects the new warehouse space, which will be built adjacent to the company's SRQ Commerce Park on U.S. 301, to rent for between $6 per square foot and $8 per square foot.

Half the building has been pre-leased, Fineberg added, though he declined to name the tenant because a lease is not yet finalized.

The three-building SRQ Commerce Park is currently 83% leased to Berry Plastics, Omicron Granite, Classic Cars of Sarasota and Florida Cooling and Supply, among others, according to Benderson's website.

A trio of outstanding leases, however, would hike occupancy at the 350,000-square-foot complex to more than 90%, Fineberg says.

Tampa office rents poised to crack threshold
Tampa's ever-tightening office market is spurring landlords to boost rents, which could cause them to push past an elusive $30 per square foot threshold.

So says Savills Studley Senior Vice President Cheri O'Neil, who contends the Class A office market downtown and in Westshore is poised to crack the figure.

“I think rates will be there before this cycle ends,” O'Neil says. “We've hit the mark before, and then we plateau, and then the rate falls back down again. But there's a different mindset now on the part of owners.”

The tenant rep brokerage firm says Tampa Class A office rents rose 8.6% over the past year, to $25.34, and dwindling vacancy — now at 13.2% from 17.5% a year ago, will push that trend.

When that occurs, new construction won't be far behind. O'Neil contends the rental rate a developer needs to break ground is between $30 and $32 per square foot.

“Rents will spike until new development occurs,” O'Neil says.

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