Chelsea Drinkard January 24, 2023 No Comments

4th Quarter 2022 Tampa Bay Office Market Report and Q1 Forecast

Important Highlights:

Tampa Bay:

Hillsborough and Pinellas Counties’ unemployment rate of 2.6% is drastically lower than the nation’s rate of 3.7%.
Year over year, average asking rates remained the same, falling by little than 1 cent per square foot.
The Tampa Bay area continued to win awards for its workforce, with Lightcast ranking Florida as the top state and Hillsborough as the eighth-best county for talent attraction in 2022.

Office Market:

Vacancy increased to just over 20% primarily due to the increase in large sublease space that came back to the market totaling Approx. 900,000 SF
Leasing activity was robust, over 3 million SF leased but did not hit record-breaking numbers in 2021. Over 80% of the activity was accounted for in Hillsborough County and a substantial decrease in Pinellas County. Westshore experienced the most leasing activity.
Direct Face Rents were up over 1% compared to Q4 2021.
Direct absorption trended favorably, finishing the year with more than 105,000 square feet. In addition, the main submarkets’ combined direct absorption of 535,000 square feet per year, comprising Westshore and CBD markets, highlights those submarkets’ demand under the current economic uncertainty.

Let’s Talk Rent Numbers:

Submarket	Overall Average Asking Rent-All Classes	Overall Asking Rent Class A
Westshore	$34.01 Sq. Ft.	$38.81 Sq. Ft.
Downtown Tampa	$29.19 Sq. Ft.	$31.95 Sq. Ft.
Northwest Tampa	$26.17 Sq. Ft.	$28.19 Sq. Ft.
South Tampa	$23.82 Sq. Ft.	N/A
I-75 Corridor	$26.08 Sq. Ft.	$27.22 Sq. Ft.
Downtown St. Petersburg	$28.29 Sq. Ft.	$34.61 Sq. Ft.

Building Highlights:

Despite the current economic instability, such submarkets continue to be in great demand. As they search for space in mixed-use buildings, Tenants like Aviation Authority, White & Case, and Primo Water moved into 174,000 s.f. of new construction in Westshore and Tampa CBD this year. Companies believe these mixed-use developments may entice workers back to the workplace.
A focus on a flight to quality buildings providing Tenant focused amenities and strategically located where employees currently live, near their grocery store, gym, and where they spend free time.

2023 1st Quarter Forecast:

The regularity for businesses to invite workers back into the office will continue to rise. In order to sustain teamwork, camaraderie, and creative collisions, those that have flexible schedules may find it advantageous to base their scheduling on personnel who operate in the same teams or departments.
If a business delays office space matters [renewing a lease vs. relocating] until the last minute, Tenants will find themselves at a disadvantage, with few alternatives, and minimal, if any leverage with negotiating based on the construction timelines and competing for availability in popular submarkets such as Westshore and Downtown Tampa.
Tampa Bay will continue to see out-of-state businesses migrate and expand to Tampa Bay.
Demand for under 5,000 SF office space could continue to remain high

What does this mean for Tenants?

Evaluate what is the best long solution for your company. What is best for the long-term well-being of the company. In a world where some work is moving more remote, how could mentoring, professional growth, and possibilities for younger employees look? Is it a hybrid, remote, or in-office job?
Vacancy rates continue to be lower in comparison to those in other major US cities and are not feeling the same “pain” despite the fact that Landlords are more prepared to offer rent abatement and increased Tenant Improvement allowance due to high construction costs.

What does this mean for Landlords?

In order to provide at least basic building standards and Tenant specific finishing, Landlord’s must consider increasing Tenant Improvements allowances for construction expenses to compete for the right Tenants.
Profit margins will be impacted by inflation, but increased rents and 3-4% annual increases can aid in the impact of inflation.
Capturing Tenants will be easier when Landlord’s provide turn-key spec office spaces that are move-in ready for companies with pressing deadlines.

Chelsea Drinkard January 24, 2023 No Comments

Why the Hybrid Work Model is Important

When the whole globe went into lockdown in 2020, many of us were forced to test out alternative employment arrangements. The majority of businesses took advantage of this as a chance to review their workplace cultures. The traditional full-time office model may soon be replaced by the hybrid model, which will fundamentally alter how businesses operate and interact with their clients, workers, and suppliers. This being said there are many benefits of the hybrid work model. According to Forbes, 83% of 9,326 workers surveyed say they prefer a hybrid model, in which they can work remotely at least 25% of the time.

A Rise in Productivity

With more freedom to play to their strengths, people can work more productively under a hybrid approach. Teams may achieve a solid mix of creativity and cooperation by promoting a culture that sees remote work as a beneficial option for finishing deep-focus projects in the office. Giving employees the option to work where and when they are most productive might benefit those who require quiet, alone environments to concentrate. According to PWC, new Research shows that as many companies have boosted workforce productivity and performance during the pandemic

More Possibilities For Lifelong Learning

The ability for employees to engage in continual learning outside of the busyness of their typical work environment is another significant and perhaps underappreciated feature of a mixed work arrangement. This implies that if they are working from their office for a portion of the workweek, they may work from home for the remaining time on personal development goals to improve their job performance and career prospects. Especially for those with long commutes, removing the community to and from the office can free up time for personal development and hobbies which would positively impact work performance.

Improved Relationships & Collaboration

Unlike remote work, hybrid work allows for face-to-face contact and cooperation, which promotes healthy team-building and, as a result, improves employee collaboration. Employees will be able to interact and build deeper working connections as a result of being given the opportunity to speak and socialize in person. This will also enhance departmental, team, and workgroup collaboration. This mainly can be true in our present environment, where many employees communicate and collaborate with their coworkers via screens rather than in person. Every face-to-face communication, which might only take place during scheduled meetings when working remotely, might create a chance for mentoring, knowledge sharing, or making crucial business connections.

Chelsea Drinkard December 6, 2022 No Comments

General Liability and Content Insurance When Leasing Office Space

Closeup of a man's hand signing a document.

Landlords do maintain building insurance but will require Tenants who are leasing office space to have General Liability and Content Insurance with a particular dollar amount of coverage in a policy including but not limited to an umbrella and per occurrence. Even just across the Tampa Bay office space market, Landlords can require a vehicle [whether the company owns the vehicles or not] and fire insurance, let’s focus on the most common which is General Liability and Content Insurance.

What Is the Definition of General Liability Insurance?

General liability insurance can assist cover medical bills and attorney fees incurred as a consequence of physical injuries and property damage for which your firm may be held legally liable. In most cases, General Liability Insurance plans will protect both you and your business from claims involving personal harm and property damage originating from your activities, services, or goods. It may also protect you if you are held accountable for your landlord’s property damage.

By paying for legal fees, financial losses, or settlements up to the policy’s maximum for covered claims, general liability insurance protects the assets of your company. Despite your best efforts, accidents might nevertheless occur in the course of business. For example, a client stumbles on a damp floor and is wounded. Your product fails and causes harm to a customer’s property. Your commercial is allegedly violating the copyright of a rival. These are just a few of the mishaps that might lead to claims and lawsuits against your company.

General Liability Policies often include:

Premises liability insurance protects you against the costs of injuries that occur on your company’s premises.
Product liability insurance protects you from the consequences of property damage and personal injury.
Injury brought on by your services or products to individuals.
Coverage for personal and advertising harm liability provides a defense against the costs associated with problems that result from your work, such as defamation, libel, unlawful eviction, copyright infringement, and more.

What Is Content Insurance?

Business contents insurance allows organizations to replace or repair their items if they are destroyed. However, most insurance plans refer to it as personal property coverage. If your personal things are stolen or destroyed by a covered risk, such as a fire, contents insurance can help pay to replace or restore them. Office contents and equipment insurance is essential for every business, protecting computers, laptops, or more advanced gear, papers, and cash which content insurance covers.

During the negotiation process of your lease, you will want to send the insurance requirements you receive from your Landlord to your insurance agent who can provide the necessary Certificate of Insurance or COI. COI’s are required to be submitted to the Landlord prior to a Tenant’s occupancy.

Chelsea Drinkard November 8, 2022 No Comments

3rd Quarter 2022 Market Report