Chelsea Drinkard No Comments

How Work Has Transformed From A Place To An Action: The Purpose of Office Space

PreCovid you would hear “I’m going to work” it was always a place to go.

Post Covid + technology you can work from anywhere, you now hear more “I need to work” or “I am working”.

Here’s the question I believe every company has to consider:

💡If work can (for the most part) be done anywhere, what’s the purpose of your office space for your people and company ?

—-> Funnel your office space discussions through this answer.

—> This will help you determine:

• Location
• Price point
• How much space you need
• The type of layout

All are used to fulfill the purpose.

The “we‘ve always done it this way”, doesn’t cut it any more. You have to dig deeper into the WHY behind having an office.

My counter parts would not want me to say this: Is having a full time office space obsolete for some companies? (keyword “some”) Definitely.

Does that apply to everyone, not at all.

We are in a unique situation being presented with the opportunity to redefine and revitalize purpose of office space and how to effectively use it as a tool for your company. Most importantly when attracting and keeping the right talent for your company.

What have you found in your company culture is the purpose of your office space?

Chelsea Drinkard No Comments

3rd Quarter 2023 Tampa Bay Office Market Report and Q4 Forecast

Important Highlights:

Tampa Bay:

Office Market:

  • Majority of activity and demand has been focused on Westshore and Central Business District (CBD) vs the suburbs which is consistent with the flight to quality trend by Tenants.
  • Class A buildings made up of over 60% plus of leasing activity in Q3 over the suburban areas.
  • Asking rents in Class A Buildings have increased by +/-6%
  • Direct asking rents are up 1% and Class A and B building in the Westshore and CBD areas for the third quarter in a row.
  • Vacancy rate in Tampa CBD is 13% and Westshore in 18%.

Let’s Talk Rent Numbers:

Submarket Overall Average Asking Rent-All Classes Overall Asking Rent Class A
Westshore $33.50 Sq. Ft. $37.01 Sq. Ft.
Downtown Tampa $40.00 Sq. Ft. $41.80 Sq. Ft.
Northwest Tampa $26.75 Sq. Ft. $27.90 Sq. Ft.
South Tampa $34.50 Sq. Ft. N/A
I-75 Corridor $26.50 Sq. Ft. $27.50 Sq. Ft.
Downtown St. Petersburg $33.40 Sq. Ft. $36.00 Sq. Ft.

Building Highlights:

  • Gas Worx: Ybor City real estate investor Darryl Shaw’s Gas Worx is a mixed-use development remaking older industrial and vacant properties between Ybor and the Channel District into a walkable area. The first phase, including 317 apartments and retail space, began construction in October and is set to open in spring 2024. A second apartment community with 370 apartments and retail will begin construction later in 2023. At full build-out, Gas Worx is planned to have nearly 5,000 residences, 140,000 square feet of retail, and 500,000 square feet of office space.
  • Ybor Harbor: Adjacent to Gas Worx, Darryl Shaw has unveiled plans for Ybor Harbor, a 33-acre mixed-use waterfront development on Ybor Channel south of Adamo Drive. The project aims to connect Ybor to the Channel District and downtown and will include up to six million square feet of residential, office, hotel, and retail space. Plans also include the development of a public area with piers, boat slips, green space, and a boardwalk lined with restaurants and shops.
  • Tampa’s Riverfront: The development boom along downtown Tampa’s riverfront continues, with projects like the 31-story luxury apartment tower Arts and Entertainment Residences and the Pendry Residences Tampa luxury riverfront hotel and condominium tower. The Tampa Convention Center is also undergoing a $38 million expansion, adding new waterfront meeting and event rooms.

2023 4th Quarter Forecast:

  • Labor Market and Economic Indicators: The tight labor market is expected to remain steady, with the unemployment rate likely to be around 3.2%, similar to the previous quarter.
  • Job Creation: Tampa Bay is anticipated to continue as a front-runner in job creation across the state, contributing to further employment growth.
  • Supply: Overall vacancy rates are projected to remain low
  • Demand: Leasing is expected to be steady into fourth quarter with majority in focused in CBD and Westshore in Class A and Trophy buildings.

What does this mean for Tenants?

Advantages:

  • Increased rent concessions from Landlords: Higher Tenant Improvement allowance towards build outs and providing free rent to decrease overall lease value.
  • Favorable Economic Indicators: The low unemployment rate and steady job growth in Tampa Bay suggest a thriving economy. For Tenants, this means a potentially larger customer base and a higher likelihood of finding qualified employees in the area.
  • Sublease Options: Sublease options can provide favorable for Tenants who prefer a shorter lease term and below market rent especially for those looking for 10,000 RSF and up.

Challenges:

  • Turn Key Options: Construction costs are still record high and the lack of turn key “Spec Spaces” Landlords have available for Tenant’s who require immediate move can require Tenant’s to lease Suites do not provide the desired layout for Tenants.
  • Lead Time: Having timelines with buffer built in will give margin for continued slow construction timelines, for architectural drawings, permit approvals and supply chain issues.

What does this mean for Landlords?

Opportunities:

  • Low Vacancy Rates For Smaller Suites: Suites under 5,000 SF and under spaces are being leased quickly.
  • Turn Key and Spec Suites: Having turn key Suites under 5,000 SF for Tenants to quickly move into will provide a competitive advantage over other vacant competing Suites for Tenants who do not have enough lead time for long construction timelines.

Considerations:

  • Tenant Selection: Ensuring that potential Tenants have a strong financial standing and align with the property’s intended use can help minimize risks associated with tenant turnover or payment issues.
  • Tenant Retention: Attracting new Tenants is essential and Landlords should also prioritize Tenant retention. Historically, it is more cost effective to maintain a Tenant then marketing, leasing and Tenant Improvement costs to acquire a new Tenant. Maintaining positive Landlord-Tenant relationships and providing excellent customer service can help ensure Tenants choose to renew their leases, reducing turnover and associated costs.
  • Building Location: If buildings are located in Suburban areas outside of CBD and Westshore will have to be more aggressive with Concessions and adjusting asking rent.
Chelsea Drinkard No Comments

How To Reduce the Cost of Office Space While Reviving the Employee Experience

The title of this article might sound unachievable but you can reduce your office space overhead while enhancing your employees’ experience. Evaluating current office space requirements and forecasting for the future can be difficult when we are faced with evolving workplace priorities and norms.

Strategy and intentionality are both needed to use office space as a tool. Below are three questions to get this conversation started:

  • “What is the purpose of our office space?”
  • “Why do we want our employees to come into the office?”
  • Most importantly, “What is the value for our employees to be at the office?”

Research shows there are three main factors that can reduce the cost of office while, simultaneously reviving the employee experience.

Flight To Quality

Flight to quality is Tenant trend we have been seeing in commercial real estate since 2021. Business opting to lease office space in Class A buildings with enhanced Tenant amenities and located in desirable submarkets surrounded with mixed live, work and play options. Is there a Publix near bar or gym options in the area? Having your office located within an area with your employees are already going reduces the mental barrier commute.

Optimize

Taking a look around your office space to determine if the current lay out is adding value and facilitating the characteristics required for employees to thrive. What can result from this exercise is realizing the company needs smaller office space for rent in Tampa.

  • Are there excess or oversized offices?
  • Too many work stations? Are work stations not optimally laid out for the organization effectiveness and work flow between departments?
  • Are small conference and break out rooms needed for team meetings?
  • Would retrofitting the layout be ideal to provide lounge areas and multipurpose areas for employees?

Experience

While employees are at the office, is their presence at the office intentional and purposeful? Employees being required to go into the office without a strategic and mindful reason do not communicate the value in person presence for those who are giving pushback on commuting to the office. Creating a schedule and effective communication to ensure the employees in the same teams are at the office on the same day is beneficial for face-to-face meetings and creative problem solving.

Having a Tenant Representative can when looking for office space for rent in Tampa or evaluating your current office space, are a great resource in sifting through these questions and decision making. Give Office Space Brokers a call for a free consultation: 813-289-3700.