Pinellas County, FL Struggles to Keep Office Vacancies in Check

TAMPA, FL--Randy Smith, Director of Research,
GVA Advantis Real Estate Services Co., says the Pinellas County office market struggled to keep vacancies in check during 2007, but by year-end, the slowdown in demand held the upper end.


In his year-end 2007 Pinellas Office Market Report, Smith says
annual net absorption went into the red for the first time since 2004 and the direct vacancy rate escalated 200 basis points over the course of
2007 to end the year at 17.0 percent.

However, rental rate growth was largely unaffected for the year as the average asking rate for class A and B space advanced 6.6 and 12.8 percent respectively. Weakening market conditions will significantly diminish any rent increases in 2008.

For 2007, office sales in Pinellas County reached a new annual highpoint with a transaction value totaling $336.1 million. This figure surpasses the total for 2005, the next highest sales year, by 81 percent. Asset values in Pinellas escalated again in 2007, with Class A buildings showing the sharpest increases.

The average sale price for Class A properties averaged $175.56 per square foot for 2007, a substantial 21.4 percent boost from the previous year.

It does not appear that the storm clouds on the national economy will dissipate anytime soon and in 2008 Florida will continue to be impacted by the housing downturn.

The local job market is expected to remain weak for most of 2008, with the exception of the education and health services sectors, which averaged a solid employment growth rate of 4.2 percent for 2007.

The conservative pace of new office construction in Pinellas will help stabilize the market until the economy improves.

CONTACT:

Randy Smith

Director of Research

Advantis Real Estate Services Company
3000 Bayport Drive, Suite 100
Tampa, FL 33607
Tel 813.342.4725

Fax 813.372.4004E-mail

rsmith@gvaadvantis.com
www.gvaadvantis.com