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My Office Space Lease Is Coming Up and The Economy Just Plummeted

Is your lease coming up in the next 6-9 months? If so, your decision to renew or relocate will have a few additional factors to consider when making the decision.

It is typical for a lease renewal deadline to be given in writing to a Landlord at least 6 months prior to the lease ending. You might find yourself in this situation, your lease is up in the next 6 months and not sure if you plan on relocating or renewing?

Check your lease for a Renewal Deadline.

We wrote a blog giving you a map, to avoid hidden traps when renewing your office space lease. Use a fine-tooth comb to check when your notice, if you chose to renew your lease, is due to the Landlord. Double check there is no requirement to notify the Landlord you will not be renewing. If you need more time, go ahead and ask the Landlord for an extension on the notice to provide to the Landlord whether you wish to renew. Office Space Brokers clients, we give clients a thirty-six, twenty-four, twelve and six month reminders to assist in this planning process.

Make a Scenario A and Scenario B plan.

Create two scenarios for your office space requirements. Scenario A is best case scenario for your business and Scenario B is worst case on how you foresee your office space needs will be impacted. Office Space Brokers provides a free resource on our website where you can calculate your office space requirements based on your ideal layout. Click here to access the calculator. 

Create Your Budget.

What is your Scenario A and Scenario B office budget? If your budget drastically decreases but the office space size requirements stays the same, considering a different submarket or changing the class of building you lease, can provide the opportunity to meet your budget. When you change from a Class A building to a Class B building that is something that could change the type of lease structure. Click here to read more about the three most common lease structures.

Commercial Real Estate typically responds to market shifts and not necessary and economic leader. As I am writing this article, it is too early to see the lasting impact except for the noticed impact in the small retail and restaurant businesses.

Having a Tenant Representative on your side will give you the pulse of the market and insight only having your ear to the ground on a daily basis can provide. Give our team at Office Space Brokers a call 813-289-3700 or cd@officespacebrokers.com to evaluate your company’s office space solution.

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Fourth Quarter 2019 Office Space Market Indicators and Report

Important Highlights:

o Unemployment rate in Tampa Bay dropped to 2.7%, lower than the US average of 3.9%.

o Tampa Bay’s economy accelerated over the past year, adding over 30,000 jobs for an annual growth rate of over 2.0%.
o Class A rent increased over 6% a Square Foot, pushing the average rent across the Tampa Bay Market over $30.00 Square Foot for the third consecutive quarter in 2019.

 
Let’s Talk Rent Numbers:

Submarket

Overall Average Asking Rent All Classes

Overall Asking Rent Class A

Westshore

$33.85/sq. ft.

$36.87/sq. ft.

Downtown Tampa

$34.62/sq. ft.

$36.39/sq. ft.

Northwest Tampa

$23.96/sq. ft.

$26.40/sq. ft.

South Tampa

$29.60/sq. ft.

N/A

i-75 Corridor

$22.53/sq. ft.

$25.78/sq. ft.

Southwest

$19.75/sq. ft.

$24.00/sq. ft.

Downtown St. Petersburg

$27.91/sq. ft.

$30.18/sq. ft.

Construction Highlights:

Approx. 2 million square feet under construction and increase in speculative construction. Tampa Bay is on tract for it “largest injection of space in over ten years.” Heights Union and SkyCentreOne are both projects underway in Downtown Tampa. Heights Union recently landed co-working giant, WeWork, as a 50,000 SF lease.  Sparkmarn Wharf is renovating the office portion creating 200,000 SF of office space. Highwoods plans to renovate the 100,000 SF in Westshore formerly leased by Laser Spine Institute.

2019 4th Quarter Forecast:

Companies outside of Tampa Bay and around Florida and the country will continue to target Tampa Bay as they identify cities to expand due to Tampa Bay’s opportunity for small to large growing companies. Tenants may continue to leave Class A+ buildings or maximize existing office space for efficiently, as they experience sticker shock and move into B buildings and other Sub-urban markets.

What does this mean for Tenants?

o Flexible office space solutions have increases with We-Work location in Downtown Tampa and Pipeline for Tenants who prefer short term and flexible options.
o Parking in downtown Tampa still remains an issue with limited spots and cost is high.
o Construction costs remain high and Tenants may have to sign a 7-year term to cover requested Tenant Improvements.
o The end of 2020 should provide a wide variety of office space options with approx. 1,000,000 Square Feet in the pipeline for new construction.
o Now is the time to have a Tenant Representative Broker advocating on your behalf. The market is dynamic, availability is quickly shifting and having a Broker who has their finger on the market pulse and long-standing relationships with Brokers will get you the best terms possible.

 What does this mean for Landlords?

o Landlords are moving forward with new Class A construction to meet the forecasted transition into smaller, sub-markets i.e. Water Street and the Heights Union with upcoming residential construction, creating a dense, live work and play environment

o Class A rent is in the $30-$45 Square Feet Full Service depending on location and new construction
o Westshore, Downtown Tampa and Downtown St. Petersburg are still highly desired areas for Tenants especially with generational shift of decision making
o Landlords of Class B and C buildings continue updates to remain competitive with new office buildings breaking ground
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Women’s History Month Client Spotlight Part Two

“In honor of Women’s History Month, I asked six clients who are women owned businesses to answer two questions about their success in business and one piece of advice and encouragement they would offer to other professional women. Each of these six women come from different industries and in most cases are trailblazers and trendsetters. Here are three of the women I highlighted. I highly recommend you read the advice and encouragement of the other three women too by clicking here.

I am so thankful for the opportunity to have worked with each of these women in identifying the right commercial real estate solution in Tampa Bay. I believe business is more than a transaction and I love working with companies who have an aligned mission. I can confidently say each of these women practice what they are sharing. Check out their website to learn more about their companies. If you have the opportunity to work with any of these women below, you could not be in better hands. Here’s to Tampa Bay, our business women leading the charge, shattering glass ceiling, making room at the table, spear heading initiatives and driving the heartbeat of our economy!” – Chelsea Drinkard.

Carrie Charles

BROADSTAFF

About Carrie:

Carrie Charles is the CEO of BROADSTAFF, a Technology Staffing Firm, named a 2019 Tampa Bay Fast 50 company. Carrie is the host of 5G Talent Talk Podcast and has been a featured expert on NBC, HSN and Clear Channel networks. Carrie is a thought leader on workforce development, diversity and is a keynote speaker at national conferences. She is a 2019 Businesswoman of the Year Honoree in Tampa Bay.

Carrie is a member of the Board of Advisors of Cable Runner,  a member of the Board of Advisors of NEDAS Technology Association, the Executive Director of Industry Relations for the Women’s Wireless Leadership Forum and is a sits on the Board of Directors of the National Pediatric Cancer Foundation.Carrie has a diverse background as a lifelong entrepreneur,

Certified Financial Planner, Master Certified Executive/Business Coach and the United States Marine Corps.

Best piece of advice for women in business:

“Build a personal brand and a strong network.  Leverage your network to build your business.  Be persistent in sales, sometimes it takes months or years to close big accounts. Do not take no for an answer EVER. Find another way.”

Key ingredient to your company’s growth:

“Hire the best people, even if they are more expensive. Nurture your business relationships by giving first, always give before you ask. Outwork everyone, including your team.  Have mentors and ask for advice from those who have succeeded in your field.”

 

Casey Corwin

Corwin Design and Graphics

 About Casey:

Casey has led an impressive career as a business owner and hands-on graphic designer in her thirty-five years working in the print marketing industry. In 2012, Corwin was named Business of the Year by the City of Tampa. Corwin has also been featured in several well-known industry publications and associations, including the Tampa Bay Business Journal, LinkedIn, the Florida Health Care Association and the National Association of Activity Professionals.

Serving as the CEO at Corwin Design & Graphics Corporation, Casey plays a major role in the day to day operations and mentoring her staff. Through her commitment to this role, she has helped Corwin retain valuable team members who have been with the company for over twenty years.

Before starting the Corwin team, she was the “hands on” Business Partner at The Sharper Edge from 1989-1993 where she was a printing press operator and graphic designer.

Best piece of advice for women in business:

My biggest advice is to follow your passion and stay on track with your goals – they don’t have to line up perfectly, they just have to be followed. When the going gets tough, that’s when you’re in your jam; keep going.”

Key ingredient to your company’s growth:

“Honesty and respect to my team and our clients. Laughter and great music (it’s my day too so we all enjoy it).”

 

Angie Speller

CEO and Lead Clinician at Enso Behavioral Healthcare

About Angie:

Angie is a Licensed Mental Health Counselor and Board-Certified Counselor. She received her Master of Arts from the prestigious Rollins College. Aside from her training in Mental Health Counseling, Angie received specialized training in Dream Interpretation, Mindfulness Meditation, and Hypnosis. Her experience in the substance abuse treatment field as a clinical director for over five years, and eleven years additional experience in the field, indicates her dedication to the recovery population and community.

To say that Enso Behavioral Healthcare provides professional, ethical, and effective mental health services is true. That’s the essence of what we do but hardly tells the whole story. Our practice aspires to be a luxury beacon of holistic services, treating the mind, body, and spirit. We believe that we will be successful if our clients are successful.

Best piece of advice for women in business:

One piece of advice that I would say to women in business is ‘don’t ever forget who you are’. It’s so important that you are represented in everything that you do. Your passion, your voice, and your vision are reflected in your work. No one, absolutely no one, is you and your business needs you.”

Key ingredient to your company’s growth:

“The key ingredient to my company’s growth is God and integrity. If I don’t enlist the support of powers greater than myself to come to my aid then I am lost. I believe there is value in investing in marketing, networking, or web designs but nothing can out measure God and asking for what I want. If I don’t ask God, the universe, or others for what I need and what my dreams consist of then I will never attract it to me. Keeping that a secret will not surprise others into viewing my success it will isolate me and keep me stuck doing it all myself. However, if I enlist the power of others support and help then they will look forward to my success and encourage my growth. Lastly integrity is paramount. I have to do what is right for people and not just myself. Selfishness and ego have never encouraged anyone to support someone. You don’t think about that selfish person and say, ‘I really want to help them succeed and do well in life’. We think this for the people who are genuine and kind and full of integrity. We want them to win at life. I want you to win at life. Be a person worth cheering on.”

 

 

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Women’s History Month Client Spot Light Part One

“In honor of Women’s History Month, I asked six clients who are women owned businesses to answer two questions about their success in business and one piece of advice and encouragement they would offer to other professional women. Each of these six women come from different industries and in most cases are trailblazers and trendsetters. Here are three of the women I highlighted. I highly recommend you read the advice and encouragement of the other three women too by clicking here.

I am so thankful for the opportunity to have worked with each of these women in identifying the right commercial real estate solution in Tampa Bay. I believe business is more than a transaction and I love working with companies who have an aligned mission. I can confidently say each of these women practice what they are sharing. Check out their website to learn more about their companies. If you have the opportunity to work with any of these women below, you could not be in better hands. Here’s to Tampa Bay, our business women leading the charge, shattering glass ceiling, making room at the table, spear heading initiatives and driving the heartbeat of our economy!” – Chelsea Drinkard

 

Arlene DiBenigno

Managing Partner Conversa & President & CEO of Women’s Conference of Florida

About Arlene:

Arlene has been a trusted adviser on political campaigns, policy development, grassroots outreach and ballot initiatives for more than two decades. She has conducted public outreach for three separate Florida governors and their administrations and has influenced presidential, gubernatorial, and congressional campaigns within Florida, Michigan, Puerto Rico, Texas, and Washington, D.C.

In early 2014, Arlene and her business partner, Kelsey Lehtomaa Frouge, founded Conversa, a full-service communications firm with a concentration in crisis communications, public relations, web and graphic design, digital marketing, community engagement and special events. Conversa has worked with numerous national, statewide and local clients including the Bill & Melinda Gates Foundation and HART.

Arlene has consistently witnessed women at a standstill and wary of their own ability to make a difference. As a result, Women’s Conference of Florida was formed.

Best piece of advice for women in business:

“Throughout the years I have met so many women who have come to me for advice and one of the things I hear most often is how unhappy they are with their jobs because they aren’t getting what they think they deserve.  This of course leads me to, ‘Well, did you ask?’ I would say about 95% of the time I am met with a look of surprise and resounding, ‘I can’t do that!’ If you can’t advocate for what you want then who is going to do it for you? 

Which leads me to the best piece of advice I can offer women in business, be confident, not confrontational, in asking for what you want and deserve. Whether it’s a pay raise, opportunity to lead a project or a promotion. Do your research, including the value add you bring to the table and ASK. In every industry women bring different perspectives which are extremely valuable to their companies/organizations and walking in your self-value with confidence, not arrogance or fear, is extremely powerful.

Key ingredient to your company’s growth:

The key ingredient to Conversa’s growth is ensuring that the person I chose as my business partner shared my same values, business mission and was steadfast in her principles. There will be many days when the outcome wasn’t what you expected or tough decisions need to be made regarding client projects, business investments or hiring/firing of employees and if you don’t share the same philosophy the damage can be irreparable.  Similar to a marriage, tough conversations need to be had on the front end; ‘what is the makeup of the clients we want to represent? Financially what can we say yes/no to? What type of employees do we want representing our company? Are we willing to walk away from clients/projects that cease to align with our values?’ Growth is the result of good decisions and good decisions are the result of strong communication so communicate often and honestly.”

 

Lindsey Smith

Founder and Director of All That Dance

About Lindsey:

Lindsey Smith began dancing at three and specialized in acrobatics and tumbling at the age of eight.  She studied at All American Dance Factory in Tampa, FL under the direction of Terri Howell for eleven years.   Lindsey taught at All American Dance Factory for ten years and learned the ins and outs of running a dance studio.

Lindsey started All That Dance when she was living in Boynton Beach, FL.  Five years later, Lindsey and her family moved back to the Tampa area. In 2014, Lindsey opened their first Tampa dance studio. This is the fifth year of All That Dance in Tampa and has grown the studio to three dance rooms and over four hundred students.

Best piece of advice for women in business:

“I would say that my one advice to women in business is to love what you do and be your best at it.  I feel proud and accomplished everyday knowing that I get to provide for my family doing what I love and also what I was trained to do.  I am proud of my college degrees but I am so happy that I can go to work each day doing something that comes natural to me and that brings a smile to my face.”

Key ingredient to your company’s growth:

“I believe that ATD has been successful because I have a positive attitude and gain satisfaction from the studio.  Every day I am reminded that I am making a positive influence in children and parent’s lives by providing them a service such as dance.  It is such an amazing feeling watching the dancers perform and gain confidence as performers.”

 

Margarita De Le Rosa

CEO of Well-Being Community Center

About Margarita:

Margarita was born in Havana, Cuba and moved to the United States in 2004.  In 2016, Margarita received a Masters in Mental Health. Margarita is very proud to say that besides her career and entrepreneurial journey, she is a wife and mother of her beautiful three-year-old daughter.

Well-Being Community Center is committed to carrying out an effective and efficient management of Health Services and striving to be a leader in the medical field. Well-Being focuses on emerging health priorities, collaborating with Federal agencies and partners. Our daily focus is educating the public, providing support and innovative health programs geared specifically to the community needs.

Best piece of advice for women in business:

“I believe that being mission focused, helping people and giving others the opportunity to do the same. We’ve experienced rapid growth in our Miami office and is reflected by our client’s satisfaction and heath improvement. We are grateful for the community impact we’ve made in Miami and look forward to reflecting the same if not more, here in Tampa for years to come.”

Key ingredient to your company’s growth:

“I believe having all the necessary tools to provide a high-quality service to clients. For us, focusing on achieving our clients’ wellbeing goals is at the forefront. Having a multidisciplinary structure, with well trained personnel in the medical field with maximum respect and professionalism through our devoted and committed staff has been a key to our success.”

 

 

 

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The Most Common Types of Commercial Real Estate Leases: Full Service, Modified Gross and Triple Net

In commercial real estate, there are typically three different types of leases structures. Knowing the characteristics ensure you know what to financially expect and budget for with your monthly office rent. In Tampa Bay, a particular type of lease structure parallels with a different type of space and location.

Two main items to consider, location and type of buildings.

For example, if you are leasing office space in the Tampa in a large building in Westshore or Downtown Tampa, nine times out of ten you have a Full Service office lease. Compared to if you are leasing office space in Carrollwood you would come across more Modified Gross or Full Services leases.

The type of building can also play a role but there are exceptions. If you relocate your office to a different type of building (from a multi-story office building to a single-story building) the kind of lease structure can vary.

What is the Difference between Full Service (FS), Modified Gross (MG) and Triple Net (NNN) Leases?

In commercial leases there are three typical types of leases that can be negotiated between a tenant and a landlord: “Full Service Gross” (FSG), “Modified Gross” (MG) and “Triple Net” (NNN). In some cities, one type of lease may be more prevalent than the others. In general, full service usually applies to a multiple story office building, MG single story office space or warehouse and NNN applies to retail space. Usually, the differences between the three lease types relates to how (and by whom) the “triple net” costs (taxes, insurance and common area maintenance (CAM)) are dealt with.

Full Service:

In an FS lease, the triple net costs and any additional costs such as utilities and janitorial, but excluding the costs of phone/data, are bundled into the base rent. FSG leases provide the tenant with the highest level of certainty regarding their complete occupancy cost; however, the downside is that the annual escalator will increase the base rate of the lease regardless of any real fluctuations in the operating expenses.

Modified Gross:

An MG lease typically includes all the triple net costs but excludes utilities and/or janitorial service. An MG lease has similar advantages/disadvantages to a FSG lease; i.e. taxes, insurance and CAM are typically bundled into the base lease rate. A unique disadvantage is that the tenant will have two additional variable costs to consider: utilities and janitorial. It is important to note that a modified gross lease can be “modified” to include or exclude any individual expense within the base rate “bundle.”

Triple Net:

In an NNN lease, the tenant is responsible for their pro-rated share of the “triple net costs”: taxes, insurance and CAM; in addition, the tenant is also responsible for utilities and janitorial. The primary advantage to an NNN lease is transparency; all of the building’s operating costs are available for the tenant’s review. The primary disadvantage is that the triple net costs are not guaranteed in the Lease and are subject to increase or decrease, increasing is much more typical.