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Letter to the editor

Tampa Bay area office rents rise, but remain 'reasonable'

By Helen Huntley
Published July 6, 2007

Office rents also are increasing in the Tampa Bay area, but at a slightly slower pace than last year.

The effective rent in the Tampa Bay area jumped 8.9 percent last year and another 1.9 percent in the first quarter of this year, according to Reis Inc. Second-quarter numbers were not yet available from Reis.

CB Richard Ellis said its research shows the average asking price for leased office space in the Tampa Bay area rose 1.9 percent in the second quarter. Downtown St. Petersburg actually saw a 3.1 percent decline, although its average rate remained the highest in the Tampa Bay area at $25.66 a square foot. The overall average in the Tampa Bay market was $20.95 a square foot.

"When you add a lot of jobs, but you don't build a lot of office space, the obvious effect is that demand exceeds supply and rates go up, " said Pat Duffy, president of Clearwater-based Colliers Arnold.

"It's very expensive to deliver an office building, " he said. "The new product that's being delivered is asking anywhere from $27 to $33 full service, depending on the location, so there's a lot of upside pressure on rents. On top of that, property taxes and insurance, which are a component of office lease rates, are up substantially."

However, he said office space in the Tampa Bay area remains less expensive than space in Atlanta or most major Florida markets.

"The Tampa Bay area is still a very reasonable office rent market, " he said.

[Last modified July 5, 2007, 23:20:17]