Absorption Low and Sinking
Office space absorption? is a periodic comparison measurement of the growth or shrinkage in the amount of occupied office space under lease in a specific market area. Usually space still in construction, available for sublease?, totally owner occupied and smaller single tenant buildings are not included.
Courtesy of The Maddux Report, here is a chart of absorption in the Tampa Bay area. As you can see, with the exception of Pasco County, commercial real estate space is not being absorbed. On the contrary the amount of available space is growing. Obviously, this is good news for tenants. With the increase in available space, there is more to choose from and landlords are compelled to offer it at lower rentals.
The Maddux report offers a nice recap of office space availabliity in its February issue. In its report it notes that many areas experienced a rise in rental rates. Maybe on paper; I suspect that most if not all rate increases have been wiped out by landlord concessions.
Tenants! This your day in the sun. This is a secular real estate opportunity that comes along once every 25 years. If your lease is coming up for renewal in the next five years, now is the time to explore options.
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