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It has been a few years since a new multi-tenant office building opened in the Tampa Bay area, and it may be a few more before another one comes along, according to a local commercial real estate expert.
Bruce Erhardt, executive director of land brokerage for Cushman & Wakefield in Tampa, says weak demand for office space has brought construction in that sector to a complete halt. Only one large building in the area had been under way, an 85,000-square-foot speculative project at Park Place in Clearwater, but work has stopped until market fundamentals improve.
“Other than owners/users, I don't believe there will be any multi-tenant spec development until 2012, delivering in 2013,” Erhart writes in his latest Land Market Overview. He noted that developers only like to deliver new offices when vacancy is 10% or less.
Overall office vacancy in the Tampa Bay market reached 20.5% by the end of 2010, with 45.4 million square feet of total inventory, Cushman & Wakefield research shows. The Bayside submarket, where Park Place is located, reached nearly 40%.
Westshore, the largest office submarket with 12.5 million square feet, ended the year at 19%, though Erhardt points out that's an improvement of nearly three percentage points from year-end 2009. Downtown Tampa, also at 19%, improved by one percentage point over the year, he says.
The Bay area's newest office building, MetWest One in Westshore, is currently 54% occupied, according to CoStar Realty Information Inc. The 10-story, 250,000-square-foot building opened nearly two years ago.
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