Chelsea Drinkard No Comments

What I Wish More People Knew Before Leasing Office Space in Tampa Bay

If there’s one thing I’ve learned after 10+ years in commercial real estate:

Most companies don’t realize how much their office lease impacts their bottom line.

Whether you’re opening your first office or relocating your headquarters, here’s what I wish every business leader knew before making their office decision:

Your lease is more than a lease agreement, it’s a business strategy.

A lease shapes your cash flow, flexibility, and company culture. Before touring a single property, get clear on your growth plan, hiring goals, and space needs. Here are a few considerations: Where do majority of your talen pool lives? What is demographics of those you plan on hiring? How do you want your team to ulitize the office space? The right lease supports your vision and just your square footage.

Square footage can be deceiving.

Two offices might both be 5,000 square feeet but one could feel half the size. Why? Layout efficiency, column spacing, and what counts as usable vs. rentable square footage. Knowing the difference between the useable and rentable with give the answer to why one “feels” bigger. Rentable square feet has a common area factor included for the shared common areas such as elevators, restrooms, stairwells, stairwelss and Tenant ammentities like conference rooms. Multistory buildings you see in Westshore, Downtown St Petersburg and Downtown Tampa area rentable buildings. Useable includes a space has their own entrance directly into the Suite, restrooms inside and does who have any shared common area space.

Watch the hidden costs

Your “base rent” is just the beginning. Operating expenses (CAM, taxes, insurance, janitorial, parking) can swing your total cost dramatically. Even in Full Service leases, there is still expenses a Tenant can be responsible before in the event the Operating Expenses surpass the Tenant’s bse year. Negotiate caps on increases or base year structures to protect your budget.

Timing is everything in Tampa’s market.

In submarkets like Westshore, Downtown, and Midtown, prime space goes fast especially for custom build outs. Start early (ideally 9–12 months before your lease ends).The earlier you plan, the more leverage you have.

Flexibility and lowest rent are not synonymous.

Shorter terms can give your business the flexibility it needs and worth the premium you pay when your company’s future is uncertain during growth mode. Making sure your lease grows with your company is important with first right of refusal to adjacent space that might come available, having favorable sublease terms and etc.

Representation matters.

Landlords have Brokers working for them, you should too. enant Representation Broker advocates only for your interests, helping you uncover hidden opportunities, negotiate better terms, and avoid costly oversights. Here’s the secret: Landlords pays Tenant Representative broker’s fee.

Final Thought

Leasing office space isn’t just about location or price, it’s a business decision that directly and indirectly impacts a company’s bottom line. A great space supports your growth, inspires your team, and strengthens your bottom line.

If you’re planning to lease or renew in Tampa Bay, let’s talk.
Even a 15-minute strategy chat can save you months of stress and thousands of dollars.

Chelsea Drinkard No Comments

2nd Quarter 2025 Tampa Bay Office Market Report and Forecast

Economic Economic Performance & Employment Trends:

Key Metrics in the Office Market:

  • Tampa’s average asking rents over all classes have edged up 2.3% year-over-year, driven primarily by a 4% increase in Class A rates, compared to just a 1% bump for Class B assets. The pricing differential between urban and suburban Class A properties continues to widen.
  • Majority of leasing activity occurred in Class A buildings in Tampa CBD, which was primarily responsible for vacancy compression
  • Overall vacancy ended at +/- 19.5% with Class A buildings at +/- 14.6%
  • Q2 ended in positive absorption of +/- 175,000 SF, up from the negative absorption in Q1 and one of the highest in the past 5 years.

Let’s Talk Rent Numbers:

SubmarketOverall Average Asking Rent-All ClassesOverall Asking Rent Class A
Westshore$36.00 Sq. Ft.$42.66 Sq. Ft.
Downtown Tampa$42.80 Sq. Ft.$45.40 Sq. Ft.
Northwest Tampa$26.57 Sq. Ft.$27.56 Sq. Ft.
South Tampa$52.00 Sq. Ft.N/A
I-75 Corridor$25.00 Sq. Ft.$26.00 Sq. Ft.
Downtown St. Petersburg$39.55 Sq. Ft.$44.35 Sq. Ft.

New Construction Pipeline:

  • Midtown East: The Primary new office construction of 85,000 SF is the second phase of Midtown Tampa, mixed use project located in the heart of Tampa. 50,000 SF has already been preleased.
  • Ybor: 95,000 SF for Grow Financial in Ybor broke ground

2025 3rd Quarter Forecast:

What does this mean for Tenants?

Advantages:

  • Companies who desire to be in suburban areas such as Northwest Tampa in near Hillsborough Avenue/ Veterans Expressway and Carrollwood and I-75 Corridor,  have more negotiating leverage on rental rate and lease concessions due to the higher vacancy rates in buildings.
  • Tenants in the 10,000 + Square Foot range have a stronger position across all Submarkets when negotiating with Landlords.

Challenges:

  • Flexible work schedules with a mix of in office and work from home, continues to be a work in progress as companies evaluate what is best for their team. Every industry is different and everyone company is different.
  • Class A rents are forecasted to continue to increase
  • The continued shift of focusing on strategic office location with surrounding amenities and environment that compel employees to want to come into the office can drive companies to the same Submarkets and buildings, creating vacancies in less desirable buildings and competition in others.

Considerations:

  • Due to low vacancy in a submarket like Tampa CBD, allow plenty of lead time before a lease ends is vital when considering a relocation or expansion.
  • Evaluating submarkets outside of Westshore or Tampa CBD, will provide more favorable rental rate and lease terms. 
  • If Tenants are finding themselves in place of uncertainty for their office space, Coworking solutions have become very common in Tampa Bay, providing a mix of individual offices and conference rooms to be used for monthly and quarterly meetings.
  • Tenants who want to subleasing their space, positioning the space below market rent and free rent will position the space to be the frontrunner with competitors. 

What does this mean for Landlords?

Opportunities:

  • Landlords with buildings located in Downtown Tampa Core or Westshore Business District, with onsite and nearby amenities should experience the most leasing activity and ability to be more selective when evaluating Tenants.
  • Tenant’s who have experienced the dramatic rent increases and leases are coming up for renewal, could now be priced out of Tampa CBD or Westshore. Outlying areas such as Northwest Tampa, may benefit. 

Challenges:

  • Buildings located in suburban corridors like the Northwest and i-75 are experiencing the highest vacancy rates with companies minimizing their office footprints and focusing on prime locations.

Considerations:

  • Landlord’s in high vacancy areas, can offer additional incentives for Tenants with shorter lease terms, higher Tenant Improvement allowance and rent abatement to incentivize companies to consider a building and location they typically would not.
  • Frequency of office space use and operational layouts are being reimagined and repurposed, consider providing conference room space for Tenants who only need use of a conference room on a monthly or quarterly basis.

Chelsea Drinkard No Comments

Why You Need A Commercial Real Estate Broker To Represent You, Even When You Know The Landlord

Venturing into a new office space lease can feel intimidating. There are so many questions you may have, concerns about things unknown. That’s why having a Commercial Real Estate Broker working on your side is crucial to a successful journey in finding your next office space for rent in Tampa.

Landlords will always have their best interest in mind as the owner and investor of the building. Brokers, on the other hand, are working with your best interest in mind. Even when you have a good working relationship with the Landlord, they are still focused on protecting themselves and their property first and foremost at the end of the day. You could be in a position of thinking you are getting a pretty good deal on your lease and your commercial property for rent in Tampa but are you really? Here are a few things to consider:

Are you aware of current marketing conditions, concessions by Landlords and standard business terms? 

Do you have comparisons to a deal on the table with other possible small office space for rent in Tampa?

When you have concerns about a potential space, who is going to give you honest feedback and real insight about what will work best to meet your real estate needs?

When you don’t have the full overview of the Tampa Bay real estate market, it’s nearly impossible to really get the best possible lease. That’s why having the right Broker can educate you on the market as a whole and advise on business points they are experiencing and seeing at competing properties. Understanding what is a market norm is very important in negotiating a commercial lease and choosing which Landlord to have a long-term business relationship. 

Commercial Real Estate Brokers are also skilled in negotiating terms. They will seek to get you the office space of your dreams with a lease and terms that are not full of deal breaking concessions. Your Broker will help ensure that you are not paying exorbitant Common Area Expenses, hidden fees and other thumbs-down terms but instead that you are treated to a fair lease with all the amenities, parking spaces and square footage you need.

When you need an office space, you need Office Space Brokers.

Chelsea Drinkard No Comments

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. 

Chelsea Drinkard No Comments

Operating Expense Reconciliation

 

 

What exactly is operating expense reconciliation, and why is it becoming increasingly important in the Tampa market?

As a Tenant in a commercial building in Tampa, you may be familiar with receiving an invoice from the Landlord for the reconciliation of the building’s operating expenses from the previous year. Typically, by May of each year, the Landlord will send you a notice with an invoice for any amount owed or a credit to your rent. If you are in a Full Service or Modified Gross lease, what are you receiving an additional invoice or credit in the first quarter of the following year?

Operating expense reconciliation is the process by which a Landlord calculates the actual operating expenses for a building over the previous year by reconciling the estimated budget expenses which were used for the Base Year of a lease compared to the actual expenses of the building for the previous year. The difference between the estimated expenses and the actual expenses is known as the “reconciliation amount.” If the actual expenses were higher than the estimated expenses, the Landlord will send an invoice to a Tenant for the amount due above the Base Year. If the actual expenses were lower than the estimated expenses, the Landlord will usually apply a credit of that amount to the monthly rent.

Why are operating expenses more crucial in the Tampa market? 

Hurricanes are a common occurrence in Florida, and the resulting damage can be significant and dramatically increase building insurance.  Hurricane Ian in 2022, insurance rates for commercial buildings in Tampa have been increasing dramatically over the past few years. Secondly, the value of commercial buildings has increased, especially in the City of Tampa, therefore so have the Real Estate Taxes. 

Landlords are responsible for holding an insurance policy on the building and passing on the cost of insurance to Tenants as a part of the building’s operating expenses. Depending on the type of lease you have, these pass-throughs will impact Tenants differently. A Full-Service lease, the rent includes the Tenant’s operating expenses, including insurance and are only responsible for the portion above your base year. 

If a Tenant has a Modified Gross lease with an Expense Stop, rent includes a certain amount for operating expenses that was agreed upon in the lease, and any expenses above that amount are passed on to the Tenant. For example, any increase in insurance rates will only impact a Tenant if the actual expenses exceed the expense stop.

How can Tenant’s prepare for operating expense reconciliation in the Tampa market? First and foremost, understand the terms of the lease and how the operating expenses are calculated. Always reach out to the Landlord or Property Manager with questions or concerns.

Consider negotiating the lease terms at renewal or when signing a new lease to establish the highest Base Year possible. For example, if you have a Full-Service lease, negotiating a cap on the amount rent can increase due to operating expenses. These caps often exclude non controllable expenses i.e. Real Estate Taxes and insurance but can still be beneficial. A Modified Gross lease, negotiating a higher expense stop can aid in avoiding additional pass throughs. 

Building operating expense reconciliation is a critical part of commercial leasing in the Tampa market, and it is becoming even more important due to the impact of hurricanes on insurance rates. Tenants must understand lease terms and how operating expenses are calculated. 

If your commercial lease is ending soon or questions on your operating expense pass through reconciliation, give us a call for a free consultation: 813-289-3700.