Sneak peek at positive CRE stats: Absorption up in Tampa Bay – Tampa Bay Business Journal.

There hasn’t been a lot of positive news for the commercial real estate industry locally.

But maybe we have some here.

The fine folks at Cushman & Wakefield are fast at work prepping their usual bevy of quarterly market data and agreed to share with us some of their preliminary results on office demand.

Richey

When they release their Q2 stats in coming days, it will show that overall absorption, which is the change in occupied space over a given period of time, will be positive in both the Bay area’s office and industrial markets for the quarter.

Larry Richey, the senior managing director of Cushman & Wakefield’s offices throughout Florida, emphasized to us that this is “great news.” His office has been predicting for about a year that mid-year 2010 would be the turning point in terms of demand in the Tampa Bay commercial real estate market.

The business of predicting can be tricky, but it looks like they were spot on.

The overall vacancy rate for the Tampa Bay office market, which is projected to be 20.2 percent, decreased four-tenths of a percentage point from the first quarter of the year.

An increase in tenant demand from companies that already occupy space within the market and an uptick in demand from companies new to the Tampa Bay area is the primary reason for the recent decline in overall vacancy, Cushman & Wakefield said.

This increase in tenant demand caused overall absorption for Q2 to post nearly 105,000 square feet.

It is the first time in nine quarters (for emphasis: more than two years!) in which the area recorded positive quarterly absorption.

Richey qualified the data, reminding me that the results from one quarter do not necessarily represent a developing trend. But he believes this turn-around will be sustainable as 2010 progresses.

The last downturn was not a problem of developing or building speculative projects or of supply, Richey said.

“It was all about lost jobs and the decline in occupancies and the lack of demand,” he said. The better absorption numbers is a sign that the worst is behind us, he believes.

“It’s all a confidence thing.”

If people are taking advantage of good deals and taking space, it’s a great time “to expand and relocate in our market,” Richey said. Sure, as the head of a major unit in a top brokerage and CRE services firm, it’s in his interest to say such things. But he presents detailed data as back up.

“We’re back to 1997 and 1998 in terms of favorable costs of doing business,” he said. That period was followed by a huge upswing.

C&W also shared preliminary Q2 2010 overall vacancy for the Tampa Bay industrial market (the combined Hillsborough, Pinellas and Lakeland markets). That is projected to be 8.3 percent, decreasing one-tenth of a percentage point from the initial quarter of the year. As with the office market, an increase in tenant demand is the primary reason for the recent decline in overall vacancy, the firm told us.

In the second quarter, leasing activity increased 35.3 percent with the quarter recording slightly over 1 million square feet of new and expansion leasing activity. This increase in tenant demand caused overall absorption for the second quarter to be in positive territory by nearly 230,000 square feet.

For more of Cushman & Wakefield’s Q2 stats, you’ll need to wait until next week.

The firm plans to release its final second quarter 2010 Tampa Bay office and industrial statistics on June 30.

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