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Business Observer Saturday, May 2, 2020 1 year ago

Office leases in region feel pandemic pinch

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Markets region-wide are down from 25% to 50%.

The office market in Florida, with the west coast of the region in the pole position, is sinking fast in one key metric, according to a report from data firm CoStar.

That metric is leasing activity. In the first full week after the announcement there was pandemic, for example, which began March 15, there was 200,000 square feet in office deals signed across all Florida markets. That’s down from than 400,000 square feet in the same week for both 2019 and 2018, the CoStar analysis shows.

The first week in April was even worse, with just over 100,000 square feet of office leases executed statewide, “some of the lowest leasing activity in Florida in years,” the report states.

Markets on the west coast of Florida posted significant declines:

• In Sarasota-Manatee, weekly leasing activity fell just below 25% of what was entered in early 2020;

• Charlotte, Lee and Collier counties saw office leasing volume decline to just over 40% of that achieved in the weeks just prior to the crisis, the report shows; and

• Tampa’s office leasing fell more than 50% of what it was during the first 10 weeks of 2020. Less than 280,000 square feet was leased in the five weeks after March 15, says CoStar in the report, compared to over 470,000 square feet in the first five weeks of 2020.

One bright spot, the report points out, is 20 office leases have been signed statewide in excess of 10,000 square feet since the pandemic began. In other words, the market isn’t completely frozen. “Despite the dampening effect of the ongoing pandemic, landlords and brokers are still pushing deals across the finish line,” states the report. “While activity has slowed, it shouldn't be ignored that this much square footage has been leased in the midst of social-distancing policies and various stay-at-home orders across the state.”

 

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