The office real estate market favors Tampa Bay's high job growth and space availability.
By STEVE HUETTEL
Published March 25, 2004
Pinellas County and downtown Tampa will be top-performing markets for office real estate in the country over the next two years, according to a new study.
The study from Cushman & Wakefield, a major real estate services firm, rated Pinellas No. 1 among 40 suburban office markets and Tampa second to Orlando among 29 central business districts.
Researchers based the rankings on a composite score of factors that included job growth, new construction, vacancy rates, asking rents and changes in the amount of occupied space, known as "absorption."
Pinellas and Tampa rose to the top largely because of forecasts that local white-collar employment will grow 5 percent this year and 6 percent in 2005, compared to 2 percent growth nationally, said Larry Richey, who manages Cushman & Wakefield's Tampa and Orlando offices.
"Florida is just booming compared to other parts of the country in job growth and did better than anyone else on absorption," he said. "Tampa Bay is right at the top along with Orlando."
Richey said the largest job increases have been clustered in five areas: nontraditional education, health care, defense, financial services and businesses tied to residential real estate, such as home builders and mortgage and title companies.
The top 50 office leases signed in Hillsborough and Pinellas counties last year included the International Academy of Merchandising & Design, Cigna, Concerta Managed Cars, Lennar Homes and KB Home Tampa.
Demand for office space in downtown Tampa has been weak, Richey said. But the city's core has gone years without a new office building and rents are low, meaning demand should pick up if employment grows as expected, he said.
"But that growth should occur evenly across the (Tampa Bay) market," Richey said. "It could end up in downtown Tampa, Pinellas or Pasco County. There's no way to predict if job growth will occur in one submarket or another."
