Tuesday, April 9, 2013

Is downtown Tampa the future?

TAMPA — The ultra-modern SouthGate Tower was to be the starting domino of downtown's workplace revival, the first new office tower since 1992, when Hurricane Andrew raged and Boyz II Men topped the charts.

The 20-story tower was trumpeted as "the beginning of the beginning," as Republican National Convention host committee president Ken Jones called it, of building up a fresher, busier downtown.

But the celebration may have to wait. With too few tenants on board, downtown's big new hope has yet to break ground. Developers now plan to open for business a year later than expected, in the middle of 2015.
It's been 20 years since the last office tower was built downtown, yet still nearly a million square feet of office space is vacant. 

Downtown Tampa

The downtown crowd was dominated by big law, finance, and government workers, all of which have been taking their hits in the employment these days.  Tampa is no longer a banking headquarters fro many mid-sized banks as it was 20 years ago or more.  All those banks have been bought up by the big players, and taking jobs with them.
Building back from a recession that emptied a fifth of downtown's office space, vacancies have improved to 15 percent and rental rates have climbed. About 200,000 square feet downtown were leased in new deals last year, on par with 2005, Jones Lang LaSalle data show, including big deals with a GE subsidiary, PNC Bank and Tampa Bay Lightning owner Jeff Vinik's hedge fund.
There is some progress, but not enough to move the needle quickly... or enough to build a new tower downtown.

Despite the other improvements downtown --which we enjoy --  the Riverwalk, museums,  and some new parks, and new apartments, we are not yet getting the business to return downtown at high enough level to make a difference.  Or at least risk the developers and investors money.
Abberger said last year that SouthGate will be built "where corporate America wants to be." That honor, though, may be better suited for West Shore, Florida's largest business district boasting twice as much office space as downtown.

Close to the Tampa International Airport, the interstate and routes to St. Petersburg and Clearwater, West Shore sits at the nexus of Tampa's office workforce. Even with pricier rents than downtown, it has lower vacancy, at 13 percent, and last year it newly leased three times as much space.

It's also the only Tampa market now fielding big office construction, including the new 10-story home of PricewaterhouseCoopers, MetWest Two.
More convenient located, more space.  It costs more.  Convenience matters.   But there are headwinds for any development these days.

Tampa MetWest at Westshore

But SouthGate could face broader challenges from a rapidly changing office model. Blue-chip firms, hyper-vigilant for efficiencies, are renting less room and crowding workers closer to cut costs and spark creativity. Smart phones, cloud computing and changing work styles are leading employees to log their hours at home or in the field. And with the job market sputtering shakily to life, some executives remain hesitant to commit to long leases or large spaces.
Telework is the big change, along with office "hoteling", shared (i.e., less) work spaces, more collaboration, less direct supervision, more results oriented management policies... and mobile computing.  Where ever you are, you are working... not just in the office.  Certainly for knowledge workers.

Perhaps that's the future.

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