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What is the Average Cost of Office Space in Tampa?

In today’s economy it’s important to know the financial responsibilities you’ll have as you begin your Tampa Bay office space rental search. There are typically three different types of lease structures in commercial real estate. Knowing the characteristics ensure you know what to financially expect and budget for with your monthly office rent. 

The three typical types of leases that can be negotiated between a Tenant and a Landlord are 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.

In Tampa Bay, a particular type of lease structure parallels a different type of space and location. For example, if you are leasing office space in Tampa in a large building on 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.

For this year we have seen East Tampa as the most financially accessible office space rent at $26/SF with Northwest Tampa coming in at $27/SF. South Tampa rents averaged $37/SF and Westshore’s average rent cost went down from 2023 to just $34/SF. Office rent for Downtown Tampa increased slightly from last year at $41/SF to 2024 at $42/SF.

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.

Looking for customized estimate of what office space to rent in Tampa Bay would be for your company? Give Office Space Brokers a call at 813-289-3700.

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How Much Office Space Do You Need Per Person?

Similar to the drinks-per-person ratio needed for an upscale gala or black-tie event, we’re here to provide you with a simple, can’t-fail approach to figuring out just how much space you actually need for each employee in your office.

The answer is: 50 square feet (4.6 sqm) per desk plus an additional 50 square feet (4.6 sqm) per personal for communal areas. 

We are firm believers that innovation comes from in-person communication, and allowing your company to have the adequate square footage will give your employees the opportunity to do just that – innovate, strategize, create. 

While today’s current work-from-home trend continues to suggest the positive incentives it offers to company owners and their employees, there are three major downsides to working virtually:

Difficulty in Building Genuine Relationships with Colleagues

Collaboration, creative problem-solving, mentorship, and team morale is more challenging when each requires a Microsoft Teams or Zoom invite to do so. According to a study done by Stanford 67% of workers are distracted during virtual meetings. 47% of people prefer in-person meetings.

Frequent Interruptions and Unsupervised Performance 

Self-regulation and focus can be difficult for most without having the accountability of your team around you like in an office. 55% of workers admit to checking their email during virtual meetings according to a study done by Stanford. 

Lack of Motivation When There’s No Comradery

When you are surrounded by people who share the same vision and purpose it is the comradery that keeps each of us motivated and feeling supported when you are having an off day or dealing with a difficult project/situation.

Whether you have a company of five or fifty, getting the right amount of square feet per person will best help set you up for success for now and in the future. Evaluating your current office space or ready to find  your ideal office space to rent in Tampa Bay with Office Space Brokers, give us a call at 813-289-3700.

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Why Did Common Area Expenses (CAM) Invoice Increase?

What are Common Area Expenses?

If you are looking for office space to rent in Tampa, this information will be most helpful to you. Common Area Maintenance (CAM) refers to the shared upkeep and maintenance costs for the common areas of a property. Several examples of common CAM include:

  • Utilities
  • Lawn care and landscaping
  • Bathrooms
  • Sidewalks
  • Elevators
  • Unique property needs such as administrative costs, building repairs, property management fees, property taxes and insurance

Commercial real estate throughout the state of Florida has experienced record highs in two main categories which are causing increases in CAM. Whether you’re looking for a small office space for rent in Tampa or a large office space lease near downtown Tampa, an increase in CAM can impact you. Both categories that have increased are what we in the commercial real estate world refer to as uncontrollable, which are Real Estate Taxes and Building Insurance.

Real Estate Taxes:

Especially, if you are renting space within city limits in Tampa or St. Petersburg, the real estate taxes are higher than those within Hillsborough county and surrounding Pinellas, Pasco and other counties. The specific location of your office space in the greater Bay area can be a factor into your increased CAM.

Insurance:

At the time this blog is being published, there are approximately less than twelve insurance companies that are writing insurance policies for commercial buildings in Florida. The increased hurricane activity over the past three years has caused insurance pricing to increase to the point where insurance companies are removing Florida from their coverage list.

What can you do as a Landlord?

It pays to do due diligence when it comes to selecting who insures you. Shop around to get pricing from several companies and if you own more than one property, bundling insurance can often give a discount. Happy tenants lead to happier Landlords. As such, it is in your favor as a Landlord to keep the CAM invoice from increasing when possible. 

What can you do as a Tenant?

When looking for commercial space, having a Landlord who owns multiple commercial properties might not a better deal on insurance premiums. Especially the larger Landlords in Florida and those who may own buildings across the country can actually lead to a higher CAM for you. Keep this in mind as you search for your best fit for an office space to rent. 

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A Key Resource for Commercial Real Estate Buyers and Sellers

In the world of Commercial Real Estate, a Commercial Real Estate Office Broker, whose primary focus is representing office space, is a key resource for Buyers and Sellers alike. Commercial Real Estate brokers specialize in buying, selling, and leasing commercial properties, such as office buildings and industrial warehouses. Expertise and experience assist clients navigating the complex world of Commercial Real Estate,  and make informed decisions about their investments.

One of the key benefits of working with a Commercial Real Estate broker is their deep knowledge of the local market. Brokers have their finger on the pulse of the local commercial Real Estate market and can provide valuable insights into trends and opportunities. Office Brokers guide Tenants and Buyers uncover properties that meet their specific needs, budget and can provide Landlords and Sellers with accurate valuations and marketing strategies.

In a Commercial Real Estate office, Office Brokers work with clients to identify their objectives and develop strategies to achieve their goals. For Buyers, this might involve identifying properties that are likely to appreciate in value or Tenants, negotiating favorable lease terms. For Sellers, pricing the property appropriately, staging it for sale, and Landlords, developing a comprehensive marketing plan.

One of the key roles Commercial Real Estate Brokers play is that of a mediator. Commercial Real Estate transactions can be complex and often involve multiple parties, including Buyers, Sellers, lenders, and attorneys. Brokers act as a bridge between these parties, facilitating negotiations and ensuring that all parties are on the same page.

Commercial Real Estate Broker offices are not without their challenges. Managing multiple transactions simultaneously, while also staying up-to-date on changing market conditions and industry trends is a fast-paced environment that is not for the faint of heart. Brokers must also understand best practices for work environment culture, be skilled negotiators, able to navigate complex deals and resolve conflicts that may arise.

Despite these challenges, Commercial Real Estate Broker offices remain a critical resource for Tenants, Buyers, Landlords and Sellers in the Commercial Real Estate market. Whether you’re looking to buy, sell, or lease a property, working with a Commercial Real Estate Broker can provide you with the expertise and guidance you need to make informed decisions and achieve your goals.



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Basics you must know about a Modified Gross Lease

A Modified Gross Lease is a type of lease agreement that is commonly used in commercial real estate for office space. It is a hybrid between a Full Service lease and a Triple Net lease, which allows for some flexibility in terms of which party is responsible for certain expenses associated with the property. In a Modified Gross Lease, the Landlord and Tenant share some of the costs associated with the property, while others are the sole responsibility of one party or the other. 

The Tenant’s rents include paying the base rent and the budget expenses including taxes, maintenance, and other operating expenses. The Tenant is responsible for their own electricity and their janitorial cleaning services. Tenants may receive an invoice for their proportionate share (based on their square footage) based on the Landlord’s reconciliation of their annual budget which surpassed the Tenant’s Base Year or expense stop. The Tenant is responsible to pay any increase in those expenses above the Expense Stop amount. These overages should be nominal since these expenses are budgeted by the Landlord. 

The specific terms of a Modified Gross Lease can vary, but generally speaking, the Landlord will be responsible for paying certain expenses related to the property, such as property taxes, insurance, and maintenance. Meanwhile, the Tenant will be responsible for paying for certain utilities, such as electricity and water, as well as any expenses related to their specific use of the property, such as cleaning, HVAC repairs, plumbing within their Suite etc.

Advantages of Modified Gross Lease for Tenants

Flexibility in terms of which party is responsible for certain expenses can be a great advantage for Tenants who may not have the financial resources to pay for all of the expenses associated with a property on their own. By sharing some of these costs with the Landlord, Tenants can reduce their overall expenses and potentially afford a property that would otherwise be out of reach.

Minimize disputes between Landlords and Tenants by clearly defining which expenses are the responsibility of each party, there is less room for misunderstandings or disagreements. This can help to create a more positive and productive relationship between the Landlord and Tenant, which can be beneficial for both parties in the long run.

Disadvantages of Modified Gross Lease for Tenants

There are also some potential drawbacks to a modified gross lease. Monthly office expenses can fluctuate because the Tenant is paying utilities directly. An issue arises when you have fluctuating utilities so you must make sure they have a buffer in their budget when budgeting expenses because the cost can vary each month.