Done Deals: Industrial Investors Look for Signs of Economic Rebound in Tampa

Sunday, July 5, 2009

Industrial Investors Look for Signs of Economic Rebound in Tampa

TAMPA, FL— The economic downturn will persist this year and drive down demand for industrial space in Tampa, according to the Midyear 2009 National Industrial Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

With the market already recording considerable job losses, and with further cuts expected, local property owners continue to search for signs of an easing in the downturn.

Also included in the report is the firm’s Midyear National Industrial Index (NII), a snapshot analysis that ranks 28 industrial markets based on a series of forward-looking supply and demand indicators. Tampa moves down one place this year to No. 24.

“During the last year, the median price of properties sold in the market fell 7 percent to $66 per square foot.,” says Bryn Merrey, (top right photo) regional manager of the firm’s Tampa office.

Following are some of the most significant aspects of the Tampa Industrial Research Report:

· In 2009, employers will eliminate 50,000 jobs, a 4.2 percent decrease. More than 46,000 positions were lost last year.

· Completions will fall to 350,000 square feet of competitive space this year from 3.1 million square feet in 2008. Also, 950,000 square feet of owner-occupied space is slated to come online.

· The vacancy rate has risen thus far in 2009 and is on course to finish the year at 11.8 percent, an increase of 210 basis points from year-end 2008. Negative net absorption of 3.1 million square feet will be recorded.

· Asking rents are forecast to decrease 7 percent to $5.56 per square foot this year,

Orange County moved up five spots to No.1 in this year’s Midyear NII, driven by a significant decline in new construction.

Last year’s leader, Los Angeles, fell to No. 2 on waning imports from Asia. Seattle held steady at No. 3 as limited construction activity will keep vacancy largely in check. Houston, ranked at No. 4, dropped two spots in the index due to the nation’s largest forecast inventory increase.

Denver rose two positions to No. 5 as expanding alternative energy companies should support fundamentals in the metro, despite the lingering recession.