Tampa Office Sector Ready for New Development
- Jun 05, 2018
The addition of new office product to Tampa, Fla., is not only a step forward for developers and prospective tenants, but it also brings a breath of fresh air in terms of quality space to the supply-constrained Tampa market that hasn’t seen new speculative office development in more than 30 years, according to JLL Senior Vice President Ron Ruffner. The Jacobson Family revealed plans for Crown Tower, a 102,355-square-foot office building set to break ground later this year in the fall, and has selected JLL to manage and lease the Class A property.
Ruffner and developer David Jacobson talked to Commercial Property Executive about the Tampa Bay office sector’s current status and how new development will impact the market. They also touched on the type of tenants Crown Tower is looking to attract, as well as the variety of amenities the property will provide upon completion.
Why are market fundamentals ripe for new office development in Tampa?
Ruffner: It’s been nearly a decade since a speculative Class A office development has even been considered to be built in Tampa. Developers are finally ready to deliver new product since tightening vacancy in downtown, Westshore and surrounding submarkets has pushed rental rates upward, a trend that will only continue as employment economics show steady growth.
Compared to the last development cycle, there are 250,000 more people in the Tampa Bay labor force. Tampa has also seen the addition of 40,000 new jobs per year for the past two consecutive years. Companies including Bristol Myers Squibb, Johnson & Johnson, Amgen and Mosaic are the more recent employers to bring high-paying jobs to the market. Additionally, Tampa fosters strong residential demographics with an impressively affordable cost of living and high quality of life.
How will new product impact the area’s office market?
Ruffner: New product will help meet the growing demands. It is crucial for the type of live-work-play setting that today’s office users are actively seeking out. It is essential for our market to provide this type of office space if we want to continue to attract marque companies to the region. Crown Tower is well suited to lead the charge for South Tampa.
How can older generation office product stay competitive in today’s environment?
Ruffner: Some traditional office tenants will benefit from the cost savings of older office product. Ultimately, a significant capital investment will be required to remain relevant in the long term. Adding new, modern amenities and updating common areas will help older office buildings to remain competitive. More costly challenges will include overcoming functional obsolescence in parking ratios, floorplate efficiency and outdated construction materials.
What are some of the area’s unique office demand drivers?
Jacobson: South Tampa is a hugely desirable office market. The area’s retail market and residential population are experiencing explosive growth right now, which is attracting new office investment. Crown Tower is strategically located at the midway point between downtown Tampa and Westshore, offering quick access to major thoroughfares, as well as Tampa International Airport. The project is filling a void in South Tampa for quality, Class A office product while placing itself at the center of where tenants want to live, work, play and shop.
What types of tenants is Crown Tower aiming to attract?
Jacobson: We’re expecting to attract professional services firms—largely, the insurance, banking, finance and legal industries. The development is designed with both workplace optimization and employee satisfaction in mind. Crown Tower will provide a solution for employers looking to attract and retain top talent, while maintaining efficient occupancy costs.
What are some of the amenities the project will offer its tenants?
Jacobson: The property will offer 360-degree views of South Tampa, a sky terrace and exterior green spaces. Structural features, including an atrium lobby and covered parking with direct access on the second and third floors, give the property executive appeal. Business-centric advantages include Level 3 and fiber optic cabling options, an on-site post office, on-site maintenance, parking ratios at 4.3 per 1,000 square feet, roundabout drop-off/pick-up access and planned retail components such as a coffee shop and infant daycare.
Firms looking to take advantage of South Tampa’s strong market fundamentals will have opportunities for exterior building signage that will increase their company’s visibility within a heavily trafficked intersection and dense banking corridor. Additional amenities include charging stations for electric vehicles and easy access to several public transportation options.
Images courtesy of JLL and the Jacobson Family