Tampa Bay’s consistent economic growth- driven by strong population and employment gains over the past several years- has made it one of the most desirable office markets in the Southeast US. However, in recent years the city’s ability to attract new, large corporate tenants has been at risk of being affected by a limited supply of Class A office space that has been prompted by a slowdown in construction. But all that is about to change as the Jacobson Family recently announced plans for Crown Tower, a 102,355-sqaure-foot office development that is rising in South Tampa. Crown Tower is the first Class A office project of its scope to be developed in the South Tampa area in more than 30 years.
We caught up with JLL’s Ron Ruffner, who will be leading the leasing efforts for Crown Tower, to learn more on why the tide is finally turning in Tampa’s office market.
Why are market fundamentals ripe for new office development in Tampa?
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 Crown Tower impact the Tampa Bay office market?
This new product will help meet the growing demand for the type of live/work/play setting that today’s office users are actively seeking out. It is crucial 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?
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, floor plate efficiency and outdated construction materials.
About the Author: Ron Ruffner is a Senior Vice President for JLL in Tampa. With over 25 years of commercial real estate experience in all aspects of development, landlord representation, land sales, land acquisitions, tenant representation and build-to-suit projects, Ron’s current role has expanded the office agency practice in the Tampa Bay area market.