Pinellas County office market
Though not perhaps as well known for its office space as Hillsborough County, its neighbor to the east, Pinellas County maintains a robust office market with nearly 42 million square feet of space.
In addition to vibrant downtowns in St. Petersburg and Clearwater, Pinellas has several pockets of rich suburban offerings, clustered in the Carillon development and elsewhere throughout the county.
The southern portion of the county, which includes St. Petersburg, has performed better this real estate cycle than the county’s northern sections, including Clearwater, where Class A space in the central business district has struggled under a nearly 20% office vacancy rate — more than twice the amount in downtown St. Petersburg.
But overall, the county’s office market has kept pace with formidable competition from both Tampa’s downtown and the Westshore Business District, in regard to positive absorption and planned development.
Perhaps most notably, Pinellas County has shaved more than 500 basis points off its office vacancy rate since mid-2014, according to data compiled by commercial real estate research firm CoStar Group.
The amount of available office space, on a percentage level, in Pinellas County at the end of the second quarter of this year. Since mid-2014, the rate has decreased from 12.9% to its current level. By comparison, the rate for the entire Tampa-St. Petersburg submarket, which also includes Pasco, Polk, Manatee and Sarasota counties, stood at 7.0% as of June 30.
Average rental rate per square foot for office space throughout Pinellas County at the end of the quarter. Four years ago, the asking rental rate for all classes was $17.25 per square foot, representing a gain of 13% since that time. Regionally, the average rental rate was $21.10 per square foot at quarter’s end, putting Pinellas’ rate in the mid range of the area’s nine distinct submarkets. St. Petersburg’s downtown maintains the highest average rental rate in Pinellas, at $26.98 per square foot.
The amount of negative absorption in Pinellas County in the second quarter of 2018. The negative figure reversed a trend of positive absorption, in which leasing activity removes space from the market, in 12 of the past 13 quarters. Overall, the Tampa-St. Petersburg market posted negative absorption of 398,681 square feet in the quarter, the first time it had notched a negative figure since 2009, when a total of 1.66 million square feet of negative absorption occurred.
Office vacancy rate in South Pinellas, the lowest amount on a percentage basis in the county at the end of the second quarter. By contrast, the Bayside section of the county has the highest office vacancy rate, at 14.2% as of June 30.
Amount that Third Lake Capital LLC paid for 200 Central Ave., the largest office sale in Pinellas County in the past year, in June 2017. The former Priatek Plaza, a 28-story tower that was completed in 1990 and totals 305,370 square feet, is occupied by Bank of Tampa, Raymond James, Merrill Lynch, Trenam Law and others.
Amount of space, in square feet, under construction in Pinellas County at the end of the quarter. The two buildings are just 4,080 square feet, or 4.7%. By comparison, four of the area’s nine submarkets had more office space under construction as of June 30, while four others had less. The I-75 Corridor had the most space in process at quarter end, at 318,500 square feet.
Amount in square feet of the largest new office lease in Pinellas County in 2018. The deal, in New Jersey-based Denholtz Associates’ Pinellas Business Center, was with NDH Medical Inc. and involved both an extension and an expansion. (Editor’s Note: CoStar listed this transaction as involving 54,510 square feet).
Source: CoStar Group