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Tampa Bay Office Outlook

Building Exterior
Building Exterior

The Tampa Bay Office Market is currently in a transition period right now.  With many employees working from home or in a mixed office/home scenario employers are working to right-size their work space.  While some companies are looking to downsize, others are looking to expand, creating a safer environment for their employees. This has led to an increase in “desk hoteling”, which is the rotation of a desk between employees working in a office/home hybrid situation. We have also seen a shift back to more privatized offices versus the latest trend of open office. 
These are important trends to follow as it directly impacts how vacancies meet or fall short of market demand. The savvy landlords and brokerages will begin to market their spaces accordingly and those that are aggressive and creative will capture a larger share of this transitioning market.

There were as many as 40% fewer office lease transactions last year compared to 2019, and the overall vacancy rate has risen by as much as 11% across the country.  Office vacancy has risen in the Tampa Bay area, but not by 11%, and there are some bright spots in our future.

Home sales and prices have been on the rise in Tampa Bay.  Homebuyers moving from California and New York have been flocking to Florida to escape the ravages of the Pandemic.  This influx of people will of course include traditional office workers, meaning that as we transition to the new normal working environment, there will be more demand for office space than there was before the Pandemic began.

With strong belief the economic downturn would recover quickly once vaccinations began being distributed, landlords have been slow to reduce their asking lease rates.  In lieu they have been offering added incentives in order to attract new and keep existing tenants.  Free rent, reduced charges for parking, and larger tenant improvement packages are some of the ways landlords have attempted to capture tenants.

We saw a similar trend in 2009 and 2010, and many office tenants were happy they pulled the trigger on longer term leases while the market was weak.  This could be a perfect time for an office tenant to take advantage of the market again.  As in 2009 and 2010, this current leasing and sales market will not last forever.

Some surveys have shown that up to 56% of employees working from home are experiencing remote burn out. The persistent virtual meetings, lack of productive group collaboration, and the struggle to separate home from work is driving excitement to go back to the office.  There they won’t have to worry about the cat jumping on their laptop, or the unlucky angle that captures their significant other in a compromising position, or the noise involved in a home full of pets and family. 

Now is the time for office users to take stock of what kind of space they’ll need in a post pandemic atmosphere, and to take advantage of the current office market.  It’s time to lock in lease rates and incentives before the world gets back to reality and rates go up while the incentives slip away. 
For any further questions or if you are looking for guidance, Call Us! Our number is 727-822-4715. 

Erik Anderson

Office and Industrial Specialist

Erik is an office and industrial specialist focusing on St. Petersburg and Mid-Pinellas County. His experience in property management as well as leasing and sales expertise allows Erik to provide a full range of services to our customers.

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CPR Team Member Closes 123 Acre Land Sale in Pasco County

Commercial Partners Realty is pleased to announce the sale of 123 acres of retail and multifamily land in the first phase of a mixed-use development on the State Road 54 corridor in Pasco County. CPR Team member Jim Engelmann represented the sellers, Smith HV & Smith MV Co-Trustees & Dolcimascolo MM et al, in the $6,282,000 transaction.

According to Engelmann, “This property is one of the last large development sites along the State Road 54 corridor.  When COVID disrupted the commercial real estate market, there were definite concerns that the retail users and residential developers would walk away from this site, as well as other properties under contract.  However, the Pasco market is very strong, and demand is high for convenience, quick service restaurants and new homes.  All of the intended users stayed under contract and are now preparing to start construction.  As the Pasco momentum continues, we will see more mixed-use developments come online.”

While the virus was definitely a concern, it did not ultimately stop the project’s developer, the Ferber Company, from moving forward.  The Ferber Company, is a privately held real estate development and investment company that is involved in a broad array of commercial real estate projects. Their clients range from local businesses to large national brand retailers. The company was pleased to close on the first phase of the project.

Ryan Plate, Vice President of the Ferber Company, praised the CPR Team for their efforts in getting the deal done.

“Jim Engelmann, with the CPR team, was an integral part to the success of this first closing. He was diligent in his efforts throughout and helped facilitate many constructive conversations with his client, which ultimately helped us get to the finish line. I’ve really enjoyed working with Jim because he helps find solutions and isn’t someone who sits on the sidelines. I know that Ferber will do many more deals with Jim and the CPR team in the future.”

The second phase of the development, which includes 41 acres of residential land, is expected to close by the end of the year.

Commercial Partners Realty is a full service Commercial Real Estate brokerage specializing in Office, Industrial, Retail, Land and Investment sales and leasing. Representing landlords, tenants, buyers and sellers of commercial real estate in Tampa Bay, Pasco County and West Central Florida, they have negotiated hundreds of millions of dollars in transactions in the region.

Commercial Partners Realty is a proud member of the George F. Young corporate family. Our parent company is a full-service professional consulting firm offering engineering, planning, landscape architecture, environmental, and surveying services throughout Florida. Established in 1919, George F. Young, Inc. has been serving the Tampa Bay area and beyond for over 100 years.