TAMPA - The largest industrial landlord in the Tampa Bay area wants to give its tenants more elbow room.

ProLogis has purchased a vacant distribution building and 18 acres along Madison Avenue in East Tampa, near the intersection of Interstate 75 and U.S. 301. The company plans to add four more buildings, creating a 350,000-square-foot distribution center called Pro-Logis Park Madison.

Construction of the first two new buildings should begin this summer, and will be ready for tenants in the first quarter of 2009. Construction and acquisition costs were not disclosed.

With the new distribution center, ProLogis becomes the latest commercial developer to set its sights on the Tampa Bay area's increasingly tight market for industrial real estate. It also joins a long list of companies transforming Madison Avenue from a rural roadway into a commercial artery.

ProLogis boasts 4.1 million square feet of warehouse, distribution and other industrial space in the Tampa Bay area, but has so few vacancies that it couldn't accommodate tenants looking to expand or relocate, according to David Hicks, the firm's vice president and market officer.

ProLogis Park Madison is the company's first speculative project in several years in the Tampa Bay area. Hicks said the company has built several buildings for specific tenants in recent years.

"Really, it's the strength of the Tampa market, and the strength of our Tampa portfolio" driving the decision behind ProLogis Park Madison, Hicks said.

Industrial tenants looking for warehouse, factory and distribution space won't find a lot of it in the Tampa Bay area. Rian Smith, a director of global supply chain solutions for Cushman & Wakefield in Tampa, said the industrial vacancy rate for the Tampa Bay area - which covers 150 million square feet of space - was 4.4 percent at the end of 2007.

The East Tampa market is the largest industrial market in the Tampa Bay area, accounting for 50 million square feet of space. It was 4.6 percent vacant at the end of the year.

Smith said it's important for Pro- Logis to expand, as many of its competitors already have announced or started construction on new industrial buildings.

"They just did not have any new product to speak of," he said. "That hindered them, being a prominent developer, and being here for the long term."

Smith said the industrial real estate market continues to perform well, although landlords and brokers are seeing signs that tenants have become more cautious about making decisions.

"The market itself is still pretty vibrant, but the velocity is down; the deals that are out there are taking longer to happen, and there are fewer of them," he said. "I think '08 is going to be a challenge, but the market is still performing."

ProLogis will have plenty of new neighbors.

Last summer, Atlanta-based Industrial Developments International entered the Tampa Bay market and broke ground on two buildings, with a combined 632,816 square feet, at Madison Industrial Park on Madison Avenue. It intends to build a total of five buildings at the site.

In the fall, Miramar-based Premier Beverage Co. bought 249 acres south of Madison Avenue for a 549,000-square-foot warehouse, which could be expanded to 1.5 million square feet in the future.

John Jenkins, a first vice president for CB Richard Ellis in Tampa, said he thinks the Madison Avenue area is attractive not just because of its proximity to major transportation routes, but because it's seeing an influx of new investment.

Jenkins is the leasing agent for ProLogis Park Madison's existing building.

"With all the great new developments going on in that Madison corridor, people will have an assurance that their investment will be protected," he said.

"When it's finished, it will look much like a modern Sabal Park," he said, referring to a nearby business park.

Reporter Dave Simanoff can be reached at (813) 259-7762 or dsimanoff

@tampatrib.com.