Flush with new offices at a time of waning demand, the Tampa Bay area's office market is suffering its first rise in vacancies since about 2003.

Until the second half of 2007, the residential real estate slump hadn't triggered a similar slowdown in office leasing. That's changed.

As builders, Realtors, mortgage lenders and title companies purged their staffs last year, the area's overall office vacancy crept up to 10.7 percent by the end of 2007, according to the Colliers Arnold real estate firm. A year ago, vacancy stood at 9.6 percent.

Adding to the excess supply was 1.6-million square feet of new offices that came on line in 2007, including projects such as Echelon Pointe in Pinellas County's Gateway market. While rents have yet to decline - they average $21.21 per square foot - it's bound to happen, said Colliers executive vice president Russ Sampson.

Sampson notes that 1-million square feet of office space is available for sublet regionally after the original tenant vacated before the lease was up. Sublet space typically rents for $1 to $3 below market.

"They're willing to give it away if someone will take it." Sampson said.

The national office market is trending the same way, reflecting an economy that economists fear will grow at a sluggish 1 to 2 percent rate this year.

On Monday, the Wall Street Journal reported the first national rise in office vacancy in four years. It singled out former hot housing markets such as Las Vegas and Orange County, Calif.

Reis Inc., a New York real estate research firm, pegged the national vacancy rate at 12.6 percent. It pulled its figures from 79 metro areas.

While the national rate is 2 points higher than Tampa's, we're on the same path based on broker conversations with prospective tenants.

"There's caution in the wind and people are kind of in a wait-and-see," Sampson said.

Even Tampa's West-shore business district, the region's largest and strongest, freed more space than it filled in 2007. The same was true of downtown St. Petersburg's office market, which has seen vacancies more than double in the past 18 months, from about 5 percent to 12 percent.

Part of the surplus stems from the opening of the new 16-story headquarters for Progress Energy. But St. Petersburg suffered another blow when Bankers Insurance Group announced it would shift most of its employees out of First Central Tower.

"Transactions are taking longer to consummate," said Randy Smith, head of research for Tampa's Advantis Real Estate Services. "The general feeling in the corporate world is you want to be careful in taking the next step."

One bright spot was Tampa's central business district, which actually improved its vacancy rate by a hair in the past year, trimming it from 13.8 percent to 13.2 percent.

Today's situation is a far cry from the past couple of years, when brokers urged tenants to lock in leases before rents shot up. Many did, including housing industry types who didn't expect the good times to end so suddenly.

"They expanded like crazy. They really built their staffs up," said Colliers president Pat Duffy.

Duffy urged calm in the face of the slowdown. Building owners are equipped to ride out a flattening market, he said.

"The landlords are pretty flush. They're not going to panic. Everyone's pretty bullish on the long term in Tampa Bay," Duffy said.

Office vacancies

Here's how vacancies have changed the past year.

Overall Tampa Bay area: 9.6 percent to 10.7 percent

Downtown St. Petersburg: 7.7 percent to 11.9 percent

Downtown Tampa: 13.8 percent to 13.2 percent

Tampa's West Shore: 7.2 percent to 10 percent

Source: Colliers Arnold