2012 q3 tampa office market report
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The Tampa Bay office market saw negative absorption of 350,754 square feet in Q3 2012, though numerous small and large leases were signed that will impact absorption in the next two quarters. Vacancy rates increased slightly to 16.0% overall and 15.7% for Class A buildings. Several developments are in the planning stages, with SouthGate, a 400,000 square foot LEED building, currently in pre-leasing. The market outlook for 2013 is positive as employment continues to increase in the region.
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2012 q3 tampa office market report
- 1. Q3 2012 | OFFICE TAMPA BAY FLORIDA OFFICE RESEARCH REPORT Tampa Bay Florida Mixed Signals: Two steps up, one back EXECUTIVE SUMMARY The Tampa Bay Office Markets absorption slowed in the third quarter; however, there were numerous small and large leases executed and this absorption will be reflected when the tenants occupy their office space in the upcoming two quarters. Downtown Tampa office space saw positive absorption with the Vinik Group occupying a full floor in SunTrust and Granite occupying 48,000 square feet in Tampa City Center. There continues to be optimism by landlords and developers. Trammell Crow and Colliers continue to work on preleasing SouthGate, a 400,000 square foot LEED Gold Building to be built on the northwest corner of Brorein and Morgan in MARKET INDICATORS downtown Tampa, just to the east of University of South Floridas new Center for Advanced Q3 2012 Q4 2012* Medical Learning and Simulation (CAMLS). Several Westshore owners are also considering building as the large blocks of space continue to be absorbed. 2013 should prove to be a positive VACANCY year for the office market. NET ABSORPTION Overall asking rates remain flat at about Tampa gained nearly 24,700 jobs in the 12 CONSTRUCTION $19.07 a square foot and concessions are months ending in June, the Tampa available in what remains as a tenant driven Hillsborough Economic Development OVERALL RENTAL RATE market. Class A Westshore rates remain the Corporation reported. That was the highest CLASS A RENTAL highest in region at an overall $25.85 per gain of any major metropolitan area in RATE square foot. Rates wont rise until vacancy Florida. Tampa also fared better than *Projected drops. Class A rates are believed to have Charlotte, N.C., Indianapolis and Nashville. reached bottom. Arrows compare current quarter to the previous quarter historically adjusted Vacancy rates remain lower than the same figures. All data in this report includes quarter in 2010 and 2011. buildings 10,000 square feet and greater. COMPLETIONS, ABSORPTION AND VACANCY RATES OVERALL OFFICE MARKET SUMMARY STATISTICS, Q3 2012 Completions Net Absorption VACANCY RATES Overall Vacancy Class A Vacancy CURRENT VACANCY RATE: 16.0% Tampa Bays overall 18% 600 office vacancy rate PREV. QTR. VACANCY RATE: 15.5% 500 rose to 16.0 percent in Square Feet (1,000s) - Bar Graph 17% YEAR AGO VACANCY RATE: 16.1% 400 the third quarter of Vacancy - Trend Line 16% 2012. Class A vacancy 300 increased slightly from NET ABSORPTION: -350,754 sf 15% 200 the previous quarter to 14% 100 15.7 percent. UNDER CONSTRUCTION: 424,199 sf 13% 0 -100 CURRENT AVG. ASKING RATE: $19.07/FS 12% -200 PREV. QTR. AVG. ASKING RATE: $19.16/FS 11% -300 YEAR AGO AVG. ASKING RATE: $19.63/FS 10% -400 Q3 '11 Q4 '11 Q1' 12 Q2 '12 Q3 '12 SOURCE: COSTAR & COLLIERS INTERNATIONAL
- 2. RESEARCH REPORT | Q3 2012 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA UNEMPLOYMENT TRENDS There was less investment sale activity as with tenants giving up 152,000 square feet. Two businesses held on to their wait-and-see of the areas six submarkets saw positive Florida Tampa MSA USA attitude. Uncertainty tied to national politics and absorption. In downtown Tampa, the Central 14 the economy are blamed. Add to that, Business District, absorption was a positive transactional volume is typically less in the 67,800 square feet. North Pinellas also had 12 summer. positive absorption of nearly 79,000 square feet In the third quarter, about 16 percent of the Bay in the third quarter. The St. Petersburg Central 10 areas 80 million square feet was vacant, up Business District saw a decline of nearly 6,900 from 15.5 percent in the prior quarter and slightly square feet. Gateway, also in Pinellas County, 8 less than 16.1 percent in the third quarter of last saw tenants give up about 27,000. year. Class A buildings in the best locations are 6 INVESTMENT SALE ACTIVITY still seeing the most activity as the flight to 4 quality continues with businesses moving to Distressed sales were commonplace, with more more efficient space in higher quality buildings. properties expected to be returned to lenders. 2 Looking forward, the outlook isnt expected to Some special servicers and other lenders differ greatly in the fourth quarter. The office continue to test the auction platform for 0 sector will improve as employment increases. distressed investment sale as a means of Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Until then, businesses will enjoy a tenants generating competitive buyer interest. In Tampa, market and continue to demand rental Sabal Parks five office buildings were listed for concessions from landlords. Professional sale on Auction.com. Not all buildings listed for The Tampa Bay MSA unemployment rate sale, however, are distressed. Some sales are services, technology and health care were the posted 9.0 percent in August 2012, which most active sectors. tied to timing issues with investment funds and represents a 19.6 percent decrease from August 2011. The State of Florida rate also CMBS loans. In Tampas Central Business ended August 2012 at 8.8 percent, while the ABSORPTION District, the 22-story Wells Fargo Center is national rate posted 8.1 percent. under contract and in due diligence. Fifth Third The area recorded overall negative absorption of Center, 201 E. Kennedy Blvd, was pulled off the Source: US Bureau of Labor Statistics about 351,000 square feet in the third quarter, market. Also in Hillsborough County, Prudential with negative year-to-date absorption of has for sale two Rocky Point office buildings, 236,383 square feet. In Westshore, the regions Island Center and Waterford Plaza. In Pinellas premier business district, tenants gave up County, TA Realty has placed its three Carillon 162,231 square feet in the third quarter. Nearly Park office buildings on the market for sale. as much space was vacated in the I-75 Corridor, TRANSACTION UPDATE SALES ACTIVITY PROPERTY NAME CLASS BUYER NAME SIZE SF SALES PRICE SUBMARKET Bayview Pavilion* A J.S. Karlton Company, Inc 92,225 $9,905,000 ($107.40/sf) Bayside Fletcher Medical Center B Health Care REIT, Inc 48,000 $8,350,000 ($173.96/sf) Northeast Tampa Centre at Feather Sound B Centre at Feather Sound LLC 63,605 $3,071,000 ($48.28/sf) Gateway 9385 N 56th St C CSI Equity 29,552 $2,100,000 ($71.06/sf) Temple Terrace LEASING ACTIVITY PROPERTY NAME CLASS TENANT NAME SIZE (SF) LEASE TYPE SUBMARKET Park Place* A (ISC)2 21,059 New Bayside Urban Centre* A Ideal Image Development Corporation 15,783 Renewal Westshore Horizon* A Crown Castle 11,073 New Westshore Two Urban Centre* A Ohio Farmers Insurance Company 6,793 New Westshore Park Tower* B Gardner Brewer Martinez-Monfort, PA 6,413 Renewal Tampa CBD Colonial Center Bayside I* *Colliers International Transaction A United Development Systems, Inc 5,100 New Bayside Corporate Center II* A Insight Global 5,000 New Westshore P. 2 | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA
- 3. RESEARCH REPORT | Q3 2012 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA UPDATE SUBMARKET COMPARISONS SUBMARKET BREAKDOWN Total Net Absorp. New Property Total Inventory Direct Vac. Net Absorp. YTD Under Avg. Direct Asking Rate Full Bldgs. Vac. Current Completions Class S.F. % S.F. Construc. S.F. Service % Qtr. S.F. S.F. TAMPA CBD A 12 4,791,174 12.7% 14.0% 71,127 63,226 0 0 $23.22/fs B,C 62 3,653,210 10.7% 11.6% -3,292 28,647 0 0 $18.22/fs Overall 74 8,444,384 11.8% 12.9% 67,835 91,873 0 0 $21.29/fs WESTSHORE A 40 7,611,440 18.0% 18.8% -69,215 17,122 0 250,000 $25.85/fs B,C 204 7,970,599 12.8% 13.4% -93,016 -85,327 0 36,000 $19.19/fs Overall 244 15,582,039 15.4% 16.0% -162,231 -68,205 0 286,000 $22.96/fs I-75 CORRIDOR A 43 6,734,830 15.9% 16.8% -97,931 -45,453 0 88,000 $21.36/fs B,C 290 9,472,422 18.2% 18.5% -53,254 33,229 0 19,272 $17.30/fs Overall 333 16,207,252 17.2% 17.8% -151,185 -12,224 0 107,272 $18.75/fs NORTH PINELLAS A 15 1,320,092 14.6% 14.6% 14,523 49,091 0 0 $19.03/fs B,C 154 3,650,712 15.9% 16.1% 64,411 53,111 0 0 $16.74/fs Overall 169 4,970,804 15.6% 15.7% 78,934 102,202 0 0 $17.41/fs GATEWAY A 24 3,077,170 3.5% 6.0% -9,933 -53,344 0 0 $21.13/fs B,C 121 4,893,867 16.2% 16.5% -17,112 -51,363 0 0 $16.49/fs Overall 145 7,971,037 11.3% 12.4% -27,045 -104,707 0 0 $17.66/fs ST. PETERSBURG CBD A 9 1,609,161 18.3% 18.7% 8,965 32,671 0 0 $22.36/fs B,C 53 2,147,307 9.6% 9.6% -15,832 -13,188 0 0 $17.37/fs Overall 62 3,756,468 13.3% 13.5% -6,867 19,483 0 0 $20.02/fs TAMPA BAY OVERALL OFFICE MARKET Total Net Absorp. Net New Overall Avg. Class A Avg. Total Inventory Direct Vac. Under Qtr. & Year Bldgs. Vac. Current Absorp. Completions Direct Asking Direct Asking S.F. % Construc. S.F. % Qtr. S.F. YTD S.F. S.F. Rate F.S. Rate F.S. 2012 3Q 1,788 80,055,699 15.4% 16.0% -350,754 -236,383 0 424,199 $19.07/fs $23.03/fs 2012 2Q 1,787 80,035,699 15.1% 15.5% 347,286 114,371 15,302 393,272 $19.16/fs $23.04/fs 2012 1Q 1,786 80,020,397 15.5% 15.9% -232,915 -232,915 53,500 389,302 $19.37/fs $23.20/fs 2011 4Q 1,784 79,966,897 15.3% 15.6% 420,544 741,991 0 406,802 $19.60/fs $23.29/fs 2011 3Q 1,784 79,966,897 15.8% 16.1% 474,801 321,447 255,000 120,802 $19.63/fs $23.35/fs 2011 2Q 1,783 79,711,897 16.1% 16.5% -103,969 -153,354 0 360,500 $19.60/fs $23.16/fs 2011 1Q 1,783 79,711,897 15.9% 16.3% -49,385 -49,385 10,492 360,500 $19.74/fs $23.18/fs 2010 4Q 1,782 79,701,405 15.8% 16.2% 158,666 53,191 0 353,492 $19.94/fs $23.44/fs 2010 3Q 1,782 79,701,405 15.9% 16.4% 268,007 -105,475 0 98,492 $19.99/fs $23.61/fs COLLIERS INTERNATIONAL TAMPA BAY FLORIDA | P. 3
- 4. RESEARCH REPORT | Q3 2012 | OFFICE | COLLIERS INTERNATIONAL TAMPA BAY FLORIDA SUBMARKET MAP 522 offices in 62 countries on 6 continents United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118 $1.8 billion in annual revenue 1.25 billion square feet under management Over 12,300 professionals TAMPA BAY CITY LEADER: Ryan Kratz Executive Vice President Brokerage | Marketing | Operations Corporate Office 311 Park Place Boulevard Suite 600 Alan Feldshue Jeff Tolrud, CCIM John Gerlach, CCIM Clearwater, FL 33759 Managing Director Office Services Managing Director, Office Services Managing Director Investment alan.feldshue@colliers.com jeff.tolrud@colliers.com Services TEL +1 727 442 7184 www.colliers.com/Alan.Feldshue www.colliers.com/Jeff.Tolrud john.gerlach@colliers.com www.colliers.com/John.Gerlach Carol Warren, CCIM Jim Allen Mia Jarrell Senior Director Managing Director Managing Director, Office Services Commercial Services Healthcare Services Group mia.jarrell@colliers.com carol.warren@colliers.com jim.allen@colliers.com www.colliers.com/Mia.Jarrell www.colliers.com/Carol.Warren www.colliers.com/Jim.Allen Christopher Leonard, CCIM Ryan Kratz Mary Clare Codd, SIOR Director, Commercial Sales Executive Vice President Senior Office & Industrial Specialist christopher.leonard@colliers.com Brokerage | Marketing | Operations maryclare.codd@colliers.com www.colliers.com/ ryan.kratz@colliers.com www.colliers.com/MaryClare.Codd RESEARCH CONTACT: Christopher.Leonard www.colliers.com/Ryan.Kratz Matt Dolan GIS & Research Administrator Claire Calzon Jim Parker, CCIM Melanie Jackson Managing Director Director Commercial Services Senior Associate Office Services Office Services jim.parker@colliers.com melanie.jackson@colliers.com Market: Tampa Bay claire.calzon@colliers.com www.colliers.com/Jim.Parker www.colliers.com/Melanie.Jackson www.colliers.com/Claire.Calzon TEL +1 813 221 2290 FAX +1 813 224 9403 Joanne LeBlanc, CPMC EMAIL matt.dolan@colliers.com Mackenzie Gerlach Kevin Yeager Associate, Investment Services Associate, Office Services Senior Associate, Office Services mackenzie.gerlach@colliers.com joanne.leblanc@colliers.com kevin.yeager@colliers.com www.colliers.com/ www.colliers.com/ www.colliers.com/Kevin.Yeager Mackenzie.Gerlach Joanne.LeBlanc David Irwin Associate, Office Services david.irwin@colliers.com www.colliers.com/David.Irwin Copyright @ 2012 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we Tampa Bay Florida cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. This report includes owner and non-owner occupied space 10,000 sf and greater. Directional arrows compare current quarter to previous quarter numbers. Accelerating success. Arrows show change when there is a 10 cent or more change in lease rate or 0.5% or more change in vacancy rate. Due to continual updates and refinements in the historical database, some of the data in this report may not match data published in previous reports. Sources: Costar Property and Colliers International Tampa Bay Florida. www.colliers.com/marketname