MARKETBEAT
OFFICE SNAPSHOT
PINELLAS COUNTY, FL
Q3 2014
A Cushman & Wakefield Research Publication
Overall Vacancy
Direct Asking Rents (psf/yr)
YTD Leasing Activity (sf)
Cushman & Wakefield of Florida, Inc.
One Tampa City Center, Suite 3600
Tampa, FL 33602
www.cushmanwakefield.com/knowledge
For more information, contact:
Angie Hunt, Sr. Research Analyst
813 204 5373
[email protected]
19.2%
17.6%
-1.3pp
$17.91
$18.16
+1.4%
541,463
823,731
+52.1%
12 MONTH
FORECAST
$18.50
20.0%
15.0%
$18.00
10.0%
$17.50
5.0%
$17.00
0.0%
2010
2011
2012
2013
DIRECT GROSS RENTAL RATE
3Q 2014
DIRECT VACANCY RATE
OVERALL ACTIVITY
2010
2011
LEASING ACTIVITY
2012
2013
0.8
0.8
0.0
0.8
0.5
0.74
1.0
0.9
msf
1.5
0.89
Average asking rental rates in the Pinellas office market ended the
quarter at $19.85 per square foot (psf), the third consecutive quarter
ending above the $18.00 mark. The most significant shifts were in class
B space in the South St. Petersburg submarket, which saw rates up
13.1% year-over-year and in the North Pinellas submarket, where
overall asking rents were down 2.3% year-over-year.
Y-O-Y
CHANGE
25.0%
0.77
ASKING RENTS UP 9.8% OVER SECOND QUARTER
Q3 2014
$19.00
LEASING ACTIVITY DOUBLED OVER SECOND QUARTER
Third quarter leasing activity was more than double the leasing activity
in the second quarter 2014. The 440,089 sf in the third quarter
accounted for over half of all year-to-date leasing activity. The highest
spike was in the Bayside submarket where class B product had 220,290
sf of activity. Two of the largest lease transactions this quarter included
the 24-7 Intouch lease with 123,116 sf in the Bayside submarket, and
Accenture’s 17,475 sf lease in the Mid-Pinellas/Gateway submarket.
Q3 2013
DIRECT RENTAL VS. VACANCY RATES
1.3
Overall net absorption in Pinellas County was positive 170,289 square
feet (sf) in the third quarter, down 17.5% from the same quarter last
year when absorption was 206,303 sf. The St. Petersburg CBD market
rebounded this last quarter with overall net absorption positive at
62,053 sf, while it was negative (27,925) sf twelve months earlier.
Additionally, North Pinellas had negative (126,829) sf last year, but
made up ground year-over-year with only negative (2,399) sf recorded
in the past quarter. Clearwater and Bayside had the best performance
in overall vacancy rates in the third quarter. Clearwater went from
21.9% vacancy last year to 13.9% this quarter. Bayside saw its vacancy
rate drop 4.5 percentage points over the same time to 23.2%.
STATS ON THE GO
0.8
ABSORPTION POSITIVE IN THIRD QUARTER
Cushman & Wakefield expects the Pinellas County office market will
maintain the current trend of positive growth through the end of the
year. Looking to the future, as tenant demand remains strong, and with
tightening vacancies, expect some built-to-suit opportunities to break
ground as well as further occupancy improvements in secondary
markets.
0.14
Pinellas County, part of the Tampa Bay MSA,
saw economic improvement in the third quarter.
The unemployment rate in Pinellas County was
5.8% in September, down 1.0 percentage point
from the rate twelve months earlier.
Additionally, nonagricultural employment in the area was up 1.3% from
a year ago with 15,600 jobs added over the year. Most of the gains
were from jobs created in the professional & business services and
trade, transportation & utilities sectors. The Pinellas office market had
another strong quarter of growth that saw rental rates increase and
the vacancy rate drop another 0.4 of a percentage point from the
previous quarter.
OUTLOOK
psf/yr
ECONOMIC OVERVIEW
2014 YTD
SALES ACTIVITY
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
1
PINELLAS COUNTY, FL
SUBMARKET
INVENTORY
OVERALL
VACANCY
RATE
DIRECT
VACANCY
RATE
YTD LEASING
ACTIVITY
UNDER
CONSTRUCTION
YTD
CONSTRUCTION
COMPLETIONS
YTD DIRECT
NET ABSORPTION
YTD OVERALL
NET ABSORPTION
OVERALL WTD. AVG
ALL CLASSES GROSS
RENTAL RATE*
DIRECT WTD. AVG.
CLASS A GROSS
RENTAL RATE*
Mid-Pinellas/Gateway
4,780,938
22.0%
21.3%
142,366
0
110,000
75,429
58,971
$18.86
$21.29
Bayside
1,622,702
23.2%
23.2%
329,281
0
0
38,293
38,293
$14.40
$19.91
Countryside
1,299,265
12.7%
12.7%
62,790
0
0
(14,470)
(14,470)
$19.10
$19.16
North Pinellas
1,400,453
18.0%
18.0%
56,033
0
0
(9,239)
(2,399)
$18.85
$18.75
580,715
14.3%
14.3%
15,429
0
0
2,249
2,249
$18.52
N/A
2,801,931
12.0%
11.8%
180,397
0
0
60,089
62,053
$19.91
$21.89
708,344
13.9%
13.9%
37,435
0
0
25,592
25,592
$17.45
$19.00
SUBURBS
9,684,073
19.9%
19.6%
605,899
0
110,000
92,262
82,644
$17.99
$20.38
TOTALS
13,194,348
17.9%
17.6%
823,731
0
110,000
177,943
170,289
$18.22
$20.68
South St. Petersburg
St. Petersburg
Downtown
Clearwater
Downtown
* RENTAL RATES REFLECT ASKING $PSF/YEAR
MARKET HIGHLIGHTS
SIGNIFICANT Q3 2014 LEASE TRANSACTIONS
SUBMARKET
TENANT
BUILDING CLASS
16120 U.S. Highway 19 North
Bayside
24-7 Intouch
B
123,116
140 Fountain Parkway
Mid-Pinellas/Gateway
Accenture
A
17,475
11101 Roosevelt Blvd
Mid-Pinellas/Gateway
KONICA MINOLTA
A
9,247
SIGNIFICANT Q3 2014 SALE TRANSACTIONS
SUBMARKET
BUYER
PURCHASE PRICE / $PSF
5380 Tech Data Drive
Mid Pinellas/Gateway
Bay Vista Office LLC
$7,500,000 / $52.49
142,892
100 Central Avenue North
St. Petersburg CBD
Covergent Capital Partners
$10,500,000 / $77.44
135,000
SIGNIFICANT Q3 2014 CONSTRUCTION
COMPLETIONS
N/A
SUBMARKET
MAJOR TENANT
COMPLETION DATE
BUILDING SQUARE FEET
(% LEASED)
SIGNIFICANT PROJECTS UNDER
CONSTRUCTION
N/A
SUBMARKET
MAJOR TENANT
COMPLETION DATE
BUILDING SQUARE FEET
(% LEASED)
Cushman & Wakefield of Florida, Inc.
One Tampa City Center, Suite 3600
Tampa, FL 33602
www.cushmanwakefield.com/knowledge
For more information, contact:
Angie Hunt, Sr. Research Analyst
813 204 5373
[email protected]
SQUARE FEET
SQUARE FEET
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2014 Cushman & Wakefield, Inc. All rights reserved.
2