Office prospects look more seriously for space

While it's no longer a shocker that office vacancy in the Tampa Bay market has hit the 20% mark, what might be surprising is that prospective tenants are even looking more seriously for space now.

With the recovery on the horizon, many local office users are trying to decide their next move, whether it's a renewal of current space or relocation to another building or submarket.

“Instead of dipping a toe in the water, they're in at knee level,” Paula Buffa, senior vice president at Grubb & Ellis Commercial Florida in Tampa, tells Coffee Talk. “They're not just kicking tires and getting information they can use to beat up their landlords.”

Buffa, a veteran of GVA Advantis before that company closed its doors last year, has formed a new office agency team at Grubb & Ellis with fellow brokers Jim Moler and Maria Camarinos Hall.

They are in the process of adding properties to their representation roster, including the 120,000-square-foot Turtle Creek office/flex project belonging to First Industrial Realty Trust at 49th Street and Ulmerton Road in Clearwater.

While far more leasing activity is expected this year compared to the sluggish (and at times non-existent) performance of 2009, Buffa says she anticipates overall vacancy in Hillsborough and Pinellas counties to stay the same throughout 2010. Asking rents, currently on either side of $20 per square foot through the first quarter, may tend to erode as landlords continue offering concessions to attract new tenants, she says.

The biggest problem, she adds, is that tenants are not likely to expand their space needs this year if they don't anticipate hiring additional personnel. On the bright side, only 115,000 square feet of new space is now under construction, adding only one-fifth of a percentage point of space to the Bay area's total office inventory of 64 million square feet, according to CoStar Property research.