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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 No Comments

Why Your Neighbors In Your Office Building are Important

What are the different types of office spaces? - Avanta Business Centre

 

The reality is your office neighbors have almost the same impact as the next-store neighbors of your house or apartment. If you are miserable in your office because your office neighbors are too loud, it’s going to be much harder to want to be in your office and get work done. If you are looking for a quiet, peaceful, and professional setting with neighbors who are the same, vice versa. You have to find office neighbors that share the same values as you.

 

Here Are Two Recommendations to Consider When Evaluating an Office Building:

1.Evaluate the Existing Tenants

Take a look at the directory to evaluate what kind of industries of the neighboring Tenants. Are any of the Tenants in the building competing in your industry? Would any of the Tenants be good neighbors to have to refer business back and forth? Check out the parking lot to determine based on the building occupancy, if there is plenty of parking available for the available office space. Some could be over-parking and negatively impact your companies’ experience.

 

2. Are Tenants Considerate in Common Areas

Cleaning after yourself when using the Tenant’s common areas including lounge, conference room and bathroom is a common courtesy and is important to consider when you share common spaces with others. Although majority of office buildings have janitorial services 3-5 times a week, janitorial services typically come in the evening. 

 

A few others include: 

  • Utilizing the smoking areas.
  • Proper hygiene.
  • Having professional behavior is a key component in Tenant common areas. Improper discussions, practical jokes and so on will soon make the workplace unpleasant. 

 

Both of these impact the type of experience your team has in the office building and thus playing a role in their experience at the workplace while your company calls that building home for the next 5+ years.





Chelsea Drinkard No Comments

Impacts of Long-Term Virtual Work

When people switch to working from home, which momentarily can boost the quantity of work they accomplish each day, work-from-home (WFH) employment cannot provide the real benefits of face-to-face interaction, such as learning and new long-term connections. The benefits of in-person work on productivity are better long-term as opposed to the short-term gains from working more at home for potentially unsustainable periods. In-person work stimulates invention. The one-time benefit from the time saved on commutes will be swiftly outpaced by an even slightly greater growth rate once workers return to their offices.

 

Members of the Team have Less Human Interaction.

Not everyone wants to be “besties” with their colleagues and treat their work for work only; however, according to Business Insider interaction helps in providing a productive and enjoyable environment. It’s also a social setting in which employees get to know one another, have casual chats, bounce ideas off one another, connect as a team, and come to appreciate the business culture. Even when you are no longer obligated to attend the monthly standup meeting physically, you might not know how much you’ll miss those free workplace coffees. 

Low Employee Morale

Building relationships with coworkers is more difficult while working from home. There are fewer chances for chance meetings or social gatherings like lunches, and happy hours. 

Inability to Focus

While some professionals find the home environment conducive to concentration and productivity, others are overwhelmed with distractions: children wanting attention, spouses, and roommates interfering, and street sounds boring into the awareness.

Overworking Dangers 

The possibility of working more hours than necessary exists when you telecommute. Burnout and increased work-related stress are unquestionably consequences of this. This may be prevented by carefully outlining your calendar and allotting certain work and personal responsibilities periods. For some people, having a designated workspace where you can leave when the workday is done is essential.



Chelsea Drinkard No Comments

Company Culture is Not Built Virtually

Company culture is not built virtually

I believe there will be long-term impacts on company culture, especially for the younger generation moving into the workforce. The newer generations are now becoming the majority in the workplace. Even if it has been some time, can you still recall running into coworkers in the corridor and catching up with them about weekend plans or a significant project you were working on? Do you have any memories of being in the right location at the right moment, providing a person with the knowledge they were lacking, or inviting a colleague to a lunch meeting or event they could benefit from? Like many others, you might not have appreciated the significance of these discussions until you started working from home. Over 50 studies have been conducted this year by Microsoft teams to investigate how the nature of work has evolved since early 2020. This endeavor includes a study of billions of productivity signals such as emails, meetings, chats, and postings across Microsoft and LinkedIn’s user bases. Additionally, a poll of over 30,000 persons who were located in 31 different nations is included. Basically,  this study found that employees feel more connected to their colleagues in the office and completely disconnected when 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 Standford. 

 

  • 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.

Chelsea Drinkard No Comments

Your Workplace is a Reflection of the Company Culture

 

 

According to Business news daily when searching for a new job, 77% of respondents said they would consider a company’s culture before applying. Corporate culture is a serious issue. According to Deloitte research, many business executives surveyed saw staff retention and corporate culture as an “urgent” issue. Given that business culture has a direct bearing on employee retention, particularly among the millennial age and younger, it stands to reason that it also has a direct bearing on the number of employees who stay with a firm.

Your workplace is a reflection of the company culture. Whether actively developed or just developed through time, every business and workplace has a culture. Cultures can be positive, feel positive, and act positively. Or they might be awful, feel bad, or behave badly. And there is a middle ground between the two. A great corporate culture is one that is shared by all employees, from the newest intern to the CEO. Culture involves putting your underlying principles into action. The business’s responsibility is to guarantee that each employee is aware of the requirements and aligns properly. A company’s culture should be one that naturally fosters inquiry, respect, cooperation, and employee wellness. In most circumstances, deciding whether something is “excellent” or “poor” is a matter of personal preference. If you want a relaxed atmosphere, a fast-paced, competitive culture will not suit you. Conversely, there is no doubt that each culture is unique, even if it makes sense for that particular industry. One of the main characteristics one company differs from another in the same sector is through culture.

The quality of an employee’s work life will be greatly influenced by the setting in which they spend that time. People are more willing to put in long hours and stick with a company for the long term if they work for one with a strong culture that matches their personal values and mission. People are considerably more inclined to quit, or even worse, underachieve while still working for the organization if the culture does not match their own personal feelings.