Office Space News
South Florida and Tampa office space update
Published November 14th, 2008 by Mike Sullivan
For years South Florida, which typically includes Palm Beach Gardens through Miami along I-95, has been one of the strongest real estate and business markets in the country over the past decade. Other parts of Florida, including the Tampa Bay area have benefited from this same trend.
However, inside sources tell aBetterOffice.com that about 6-9 months ago Tampa Bay and the northern reaches of South Florida (Palm Beach County) saw a sag in occupancy of commercial office space, and as the economy began to falter, all of South Florida began to see some significant problems, given that their bubble was among the biggest. Miami seems to be less problematic than the rest of South Florida and Tampa, but is still faltering.
The bad news is that the commercial office space market in Tampa is only getting worse. Some executive office suites are experiencing significant occupancy problems. I would expect some to close. South Florida, on the other hand, still had relatively strong occupancy 6-9 months ago, when Tampa was already losing significant ground. Let’s hope the economy doesn’t falter too much more so that areas like Tampa do not experience continue declines in occupancy. You can read more about office space in Tampa and some of its occupancy challenges in this article on Tampa Bay Online.
CB Richard Ellis’ research indicates that the inside information we have is solid. The general commercial office space market shows these same trends. Palm Beach County has lost 8 points of vacancy over the past year, Tampa has lost 4 points, and Miami has only lost 2 points.
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Elizabeth Sanchez November 15th, 2008 at 3:14 pm
You’re right. The Tampa Bay Metropolitan Statistical Area’s economy has continued to fall deeper into economic instability as 2008 has progressed, according to Cushman & Wakefield. This downturn in the economy was initially inspired by the negative influence of the severe depression experienced in the local residential real estate market that began in early 2007, and now the slump in the local economy is being fueled by the current credit market crisis. One can only hope the banks start lending so that companies looking to rent office space have the confidence to grow again.
Bill Brookshire November 19th, 2008 at 1:16 pm
Has anyone looked at Broward County’s office market? Broward County has a pretty diversified local tenant base that includes automotive, financial services and technology firms. All of these industries have been affected by the credit crisis through consolidations and downsizing, so that’s making its market on the office market. Cushman & Wakefield data shows third-quarter overall vacancy for the region remained 14.3% during the third quarter. The sublease vacancy rate rose from 0.5% to 1.1% since mid-year.
Long story short, there’s a lot of favorable leasing options in that market. Could make serviced offices less attractive for the short-term. Rental rates are under $28 per square foot. Still, executive suites have the advantages we’ve all been discussing. It’s fascinating to speculate. I’d like to hear from some serviced office developers about what’s happening on the ground in their respective cities.