Chelsea Drinkard No Comments

How Could the Corona Virus Change the Future of Office Space?

Short answer, it’s too early to tell the impact the Corona Virus will have on office space market in Tampa Bay. However, there are a couple of factors based on the shift we have seen with the Corona Virus that could impact office layout, cleanliness and the space requirements. Reviewing the top three factors which were impacted from the Corona Virus were air quality, limiting the touching of common surfaces and shared common areas. Below I have addressed the three different areas and how each could be impacted.

Cleanliness and Air Quality.

Good air quality has already been correlated with productive work environments and minimizes the number of sick days. Air quality improves the over all sense of well-being, focus and productivity. Buildings who have high standards for air quality and circulation will be favored over others. If a technology is created to minimize this impact of virus spread, this could also be a consideration when companies are reviewing which office buildings can provide the safest environment.

Landlords could increase cleaning standards by their janitorial companies in common areas such as fitness centers, bathrooms and elevators. The recent addition of Tenant lounges in office buildings with shared kitchens, meeting spaces and activities will have be evaluated with new cleanliness standards or reconfigured. Tenants who hire their own janitorial services, might have to comply per their lease, cleaning standards within their office suites.

Office Layout.

We have seen the trend of more open work environment shift over the years, some with smaller work areas and bringing people closer together. For example, think of two long tables with employees on each side, creating a community work area that several companies have adopted. Work stations moved into shorter “walls” to create a collaborative and open environment.

The immediate use of small and large conference rooms could be avoided. The changes of the 6 feet in between individuals which has been mandated could translate into the layout and space needed to fit the same 20 people may increase thus, requiring more space allotted per person. Individual offices could return as a solution or larger work stations with taller walls and dividers could make an appearance. Click here to read the average work stations and office sizes and what is your company’s ideal size.

Working From Home.

I have heard some say companies transitioning to working from home could reach a point where production is consistent and the habit of working from home has created a new culture which the staff prefers. I do not believe this 100% work transition will occur, it depends on the industry, company and the culture of the company.

I believe the 100% transition to remote work may be less common, a hybrid of minimizing the number of people in the office and frequency may be more common. The opposite could also be true, realizing the need for in person communication and collaboration is required for productivity.

 

Making  the protection of health and safety of employees a top priority, will reduce risk and position companies to be a top employer of choice in a competitive environment. Having a Tenant Representative on your side will provide an advantage only an expert with their ear to the ground on a daily basis can deliver insight and market specialization. Give our team at Office Space Brokers a call 813-289-3700, for a consultation to strategize your company’s office space steps.

Chelsea Drinkard No Comments

3rd Quarter Office Market Update

It’s safe to say that the Tampa Bay office market hit a new record with the longest vacancy rate since 2008. The uphill climb of the market has continued as Tenants take a big gulp at climbing rate increases and Landlords are in control as vacancy decreases.

Tenants who have been locked into a lease for the past five years are experiencing sticker shock when reviewing available office option on the market. As rates increased in Class A offices in Westshore and Downtown Tampa, Tenants have moved into Class B options and outside of the core Westshore and Downtown Tampa area for financial refuge. The supply and demand curve has continued to be skewed towards the Landlord, therefore minimizing options for Tenants – especially under 3,000 square feet footprint.

A lot of chatter has been happening since the Midtown Office/Retail project was announced on the corner of North Dale Mabry and Gray Street, just north of Kennedy Boulevard. Sparkman’s Wharf in Channelside with updated retail and restaurants, mixed office and retail Water Street project in Downtown Tampa broke ground. Developers and Landlords are responding to the demand for more office space and those are just three of the largest projects that are on their way.

The Tampa market has experienced an approximately 3% increase in suburban areas and approximately 4% rate increase in City core Year To Date for Class A office space since Third Quarter 2017.

Below is the average asking rent for Class A full service office space:

  • Westshore: $33.20/sq. ft.
  • Downtown Tampa: $30.09/sq. ft.
  • I-75 Corridor: $25.89/sq. ft.
  • Downtown St. Petersburg: $29.06/sq. ft.

What does this mean for Tenants?

  • Ensure enough lead time to view options on the market. If you have 5-20 employees and typically waited three to four months prior to relocation for a new office space, six months would now be a better margin. For larger Tenants, allow for 12 months or more.
  • Your Broker can’t control what the market is baring as average rates. This could mean moving into a different quality of office space, relocating to a less dynamic submarket or minimizing your foot print to meet your budget requirements.
  • Have one or two backup options when pursuing your new office space. This is one of the most dynamic markets we have experienced, so strategize accordingly.

Now is the time to have a Tenant Broker advocating on your behalf. The market is dynamic, availabilities are 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 as possible.