Tampa Commercial Real Estate | Florida Commercial Property

Excerpt from the Tampa Bay Business Journal:

Vacancy rates are continuing to rise in the Tampa Bay area’s office market as regional employment is expected to decline by 54,600 jobs by year’s end, states a fourth-quarter report by Marcus & Millichap.

About 2,100 office jobs have been eliminated monthly throughout 2009, dropping overall office employment to a level last seen in 2003, states the report. A resumption of hiring is still several months away.

That means vacancy rates will continue to climb while rental rates decline. (Complete Story)

Commentary:  We continue to see sprouts of green on the barren economic landscape right now, but unfortunately, employment and subsequently vacancy is going to continue to be an issue in to the first quarter of 2010, if not further.  As has been stated many times in this blog, Tampa, Hillsborough County and the State of Florida have been entirely too reliant on construction and growth with limited thought or planning as to what would happen when the music stopped.

For those interested, we have started a LinkedIn group to discuss the issues at hand.  (Click here for the LinkedIn Group)

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Class B Space in the heart of downtown Tampa. The space was recently improved and would be considered high end class B. Rates are below market. This video was prepared for a tenant that we are representing to assist them in finding office space.

Eric W Odum
Lic. Real Estate Broker
813-514-1070

Need to talk to us? 813.514.1070
or email by clicking HERE!

Atlanta Journal Constitution:  Reconfiguring Office Space

We certainly have our share of vacant space in the Tampa market.  The downtown corridor is expected to top 20% this year.  Vacancy is usually associated with failed businesses, but that is not always the case. There are many surviving businesses, for example, that needed 10,000 square feet in 2006 and now only need 6,000 square feet.  The “shadow” market vacancy rate can be much larger than the published rate, particular in downturns, like the one we are currently experiencing.   Businesses have retracted and they have either laid off workers or natural attrition has taken its course.  The problem is, the leases can run for years after the space becomes available.  What can or should these businesses do with all of their excess space.  Here are a couple of ideas:

1. Donate the space to charity – Non-Profits have been hit particularly hard by this downturn.  Many are finding it difficult to sustain themselves.  If the tenant is not using the space, donating their excess space (and allowing the non-profit to remove or reduce their current rent overhead) could allow a local charity to keep their doors open and continue their good work for the community.
2. Sublease – There is an ACTIVE sublease market.  Some of these spaces are advertised.  Other businesses prefer to not actively “market” their space.  Sub-lease spaces are almost always rented at less than current market rates. This can offer very good opportunities for companies in the market for space.
3. Renegotiating with the Landlord.  There are all kinds of ways to do this.  Your landlord understands that this is a challenging market.  They are usually willing to try to keep good tenants and there are many ways in which the landlord can show goodwill to the tenant without a major disruption in rent or income for the landlord.
4. Sharing office space.  Start-up firms are often willing to share space with an established tenant for a short period of time, while their business is getting off the ground.   There may even exist synergies between the two firms that would create business growth for both companies.

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An eye opening report came out today from Richard Parkus of Deutsche Bank Securites stating that the U.S. urban commercial real estate markets probably will not recover until 2017.  He goes on to compare the current state with the early 1990′s.  I am curious how he reconciles the level of inventory on the market today as compared to 18 years ago.  Annecdotally, Tampa never experienced the speculative commercial build out this decade as it did in the late 80′s and early 90′s .  The softness in this market is due to demand issues and not over-supply, as was the case 2 decades ago.  (read more about Real Estate Market)

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Florida Real Estate Journal Reports:

TAMPA – As of 1Q09, Tampa Bay’s user and investment office market is best defined as “systemic monetary gridlock” as the U.S. economy still searches for its trough. Lending facilities remain stingy as several life insurance companies -normally a major source of liquidity – announced plans to significantly scale back portfolios. Meanwhile, multiple government bailouts (TALF) have shown no positive results in the near-term and will lead to an inflationary period for real estate pricing. (…more on Tampa Office Vacancy )

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This is space available on South Dale Mabry, Tampa Florida, shot for one of our clients we are representing for office space. Is this what your broker is doing for you?  Or are they wasting a lot of your time dragging you around to each space they think might work?  Maybe you are you driving around trying to learn the market yourself.  Please stop, because there is a better way.  We video each property for you, so you can review each space from the comfort of your home or office. This will allow you to narrow the selection without investing hours and hours of YOUR time. Do you know the best part? In almost all instances, the landlord pays our fee, not YOU, the tenant. Doesn’t it make sense to have someone on your side of the table to find, negotiate and make the selection of a new office or retail space MUCH easier?

Eric Odum

Lic. Florida Real Estate Broker

813-514-1070

Need to talk to us? 813.514.1070
or email by clicking HERE!