Tampa
Tampa fared the worst in the second quarter posting negative absorption of 296,000 square feet because of closings by major retailers. Small shop leasing helped, however, posting positive absorption of 26,000 square feet.

Despite the net absorption, the vacancy rate in Tampa stands at a relatively low 7.7 percent. Average asking rents fell 3.2 percent to $14.67 per square foot from the first quarter.

Click for the full report at Retail Traffic magazine

Date: May 28, 2010

BUYER: Kforce Services Corp. Tampa, FL

SELLER: iStar CTL East Palm — Tampa LLC

PROPERTY: 1001 E. Palm Ave., Tampa

PRICE: $28.5 million

PREVIOUS PRICE: $1.25 million, September 2000

PLANS, DESCRIPTION: Kforce Inc. purchased its headquarters in Ybor City for $28.5 million.

The price equated to $213 per square foot.

The four-story, 133,660-square-foot building was originally built in 2001. It occupies a 6.37-acre parcel and features a 4,200-square-foot fitness center, 100-seat cafeteria, coffee bars on each floor and an outdoor basketball court.

Kforce previously leased the building from iStar, a commercial real estate firm.

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Date: June 24, 2010

BUYER: MCA Enterprises Brandon, Inc

SELLER: Florida Wings Group, LLC

PROPERTY: Brandon Crossroads

PRICE: $2.6 million

PREVIOUS PRICE: $.7 million, January 2004

PLANS, DESCRIPTION: The property includes 2.01 unesable acres of land, and is improved by free-standing, 6,600 square foot Buffalo Wild Wings restaurant built in 2004.

The price equated to $394 per square foot.

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Comments:

There were also a couple of sizeable trades on apartment complexes, recently.  Providence Place apartments in Brandon, FL sold on August 4, 2010 for $30 million and Carrollwood Station Apartments sold for $18.9 million on August 6, 2010.  It is good to see some of these larger trades begin to happen.

Highlights from Report:

Results of the second quarter survey indicate that the Florida commercial real estate market continues to stabilize near or at the bottom. However, given the significant uncertainty that continues to hang over the general economy and particularly the state economy, most respondents believe we will hover along the bottom for the next several quarters.

Tampa-St. Petersburg

• Cap rates in the Tampa-St. Petersburg area are, on average, equal to that of the state, and range from 8.0% (Apartments) to 12.2% (Condo Conversion).

• Cap rate changes were mixed over the past quarter across property types, with the largest changes occurring in Warehouse (-0.47% change) and Flex Space (+0.42% change).

• Cap rate outlooks indicate that rates are expected to remain stabile across most property types in the next quarter.

• Required yields for Tampa-St. Petersburg are slightly higher, on average, than that of the state, 12.54% compared to 12.51% statewide.

• Required yields are highest for Condo Conversion at 20.4% and lowest for Office: Class A at 10.7%.

• Required yields increased across most property types last quarter. The largest shifts in required yields occurred in Condo Conversions (+3.44% change) and Free Standing Retail (+1.93% change). The largest decline occurred in Retail – Large (-0.85% change).

• The investment outlook is neutral to positive across property types, with the most positive outlook occurring in Apartments and the most negative outlook is in Condo Conversions.

• The outlook for Land Development appears to be neutral to negative for all land classifications with the exception of Land with Residential Entitlements which has an outlook of neutral to positive.

• Future occupancy is expected to remain stable for all property types except Free Standing Retail which is expected to decline further.

• Rental rates are expected to increase slower than inflation across almost all property types over the next quarter.

Comments: Certainly from our perspective, the market is stabilizing.    A relatively new occurrence is the emergence of the national and region retailers back to the market.  Doing deals?  Hmmmmm, not so much, but they do seem to be out sniffing the periphery of the market and testing what types of deals can be had.  This is a stark contrast to the same period last year, in which national and regional retailers were noticeably absent from our market and what little activity there was in the market involved primarily local-based, single location tenants seeking better deals or taking advantage of reduced rents by upgrading space.

While the office market appears to be stabilizing, high unemployment in the Greater Tampa Area will continue to be a drag.  Sub-lease offerings continue to weigh on the market, though new sublease offerings appear to have slowed to a trickle.  Displaced attorneys tend to be the most active in small spaces in the Downtown Central Business District (CBC).  Space that is close to the court house and or caters to the legal profession can be successful in attracting tenants.  Landlords must be open minded and creative in their efforts to attract tenants. It is our understanding that there is a substantially sized sublease space in the CBC that will come off the market shortly.  Expect further word in the near term.

Though not a scientific study, tracked in-bound, unsolicited requests in to our office from potential tenants/buyers seeking assistance with site location have increased noticeably this year compared to last.  It should be noted however, before landlords become too excited that the market is set to take off, that it would be near impossible for there to be less representation requests than 2009, which was a shockingly poor year.  We are cautiously optimistic moving forward, along with some teeth gnashing over longer term effects that the BP oil spill might have in our market.  All things considered, we have escaped relatively unharmed in the Greater Tampa Area, although hotel operators would probably strongly disagree.  Activity has increased and buyer/tenants are beginning to dip their toes in the market.  In the mean time, we will keep our fingers crossed and hope there is some carry through.

Every month, we try to post a handful of interesting sales or other lease activity in the area.  Here are some of the recent high profile transactions in the Tampa Area:

• Sams Club (SAM’s East, Inc.) purchased a tract of land from DeBartolo in Southeastern Hillsborough County, close to Summerfield in Riverview, Florida on February 10, 2010.  The purchase price was $5.2 million
• Chase Bankcard Services quit claimed 2 large parcels in Fountain Square to BREOF BNK3A Independence LP, whose address is c/o Brookfield Real Estate Opportunity Fund in Brooklyn NY.  It appears that Chase Bankcard purchased one parcel in 1993 for $31,000,000 (L2B1) and the other in 1994 for $3,500,00 (L1B1).  The quit claim values were listed at $15.75m and $27.75m, respectively.  Feb 18, 2010.

HHGregg Dives in to Tampa

June 11, 2009

With the shuttering of Circuit Cities around the area, another consumer electronics store is looking hard at taking vacated space in the Tampa market.  Could the Circuit City store on N. Dale Mabry be an option? (Retailer Moves to Tampa)