(TAMPA, FL) -- Like most of the other Florida industrial real estate markets, metro Tampa finds itself with rising vacancy and declining rents, reports Randy Smith, regional director of research in the Tampa, FL office of GVA Advantis.

The direct vacancy rate rose by 300 basis points to end the year at 7.3 percent.

The average asking rental rate, which peaked at year-end 2007, declined by 15.9 percent during 2008 to end the year at $6.44 per square foot.

"The (fourth 2008) quarter marked a significant downturn in the economy as the nation's gross domestic product nose-dived by 6.2 percent," says Smith.

'This collapse, along with sluggish consumer spending and declining industrial production throughout 2008, combined to stifle the demand for industrial space.'

Rent performance weakened "in response to the increased availability of Tampa's industrial space," Smith says..

Tampa's industrial sales maintained some momentum in the final quarter of 2008, totaling $48 million in transactions closed.

This period also produced Tampa's largest industrial deal of 2008 -- a portfolio of 15 flex buildings located in east Tampa's Breckenridge Park which traded for $28.4 million. The buyer, Miami-based Adler Group, Inc., acquired the 332,582-square foot complex in October using a $100-million fund seeded by a major European investor.

 "It's clear that industrial property owners will face a challenging year in 2009," notes Smith..

He adds, "Tampa's linkage to residential housing was a primary cause of its downturn in local industrial activity and continuation of this housing turmoil in 2009 will contribute to increased vacancies.

New industrial construction is gearing down in Tampa, with about 300,000 square feet of speculative space to be completed in the first quarter of 2009.

"The tightening credit markets will make financing new industrial projects more difficult and be another strong constraint on additional supply," predicts Smith.

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