Thursday, April 26, 2018
Business

Tampa Bay office buildings add perks, in part to attract millennials

Back in the old days, say the early 1980s, most office buildings were pretty bland affairs with few amenities. If there was a place to eat, it probably offered little more than chips and ham sandwiches.

That was then.

Now, the Take 5 cafe in Tampa Bay Park, a West Shore office complex, features grilled salmon and chicken marsala. Or you can dine al fresco on the new waterfront deck with chaise longues.

At the Wells Fargo Center in downtown Tampa, no need for tenants to trudge blocks to the courthouse. A chauffeur in a shiny black Lincoln Navigator will ferry them right to the door. At no charge.

And at the nearby Park Tower, formerly known as the Lykes Building, bad-hair days can be remedied on the premises. A unisex hair salon offers shampoos, cuts and blow-dries.

All over Tampa Bay, older office buildings are undergoing multimillion-dollar renovations and adding perks like free Wi-Fi and outdoor seating. Part of the reason for the big outlay is simply to maintain and modernize structures showing their age with dim lighting, popcorn ceilings and creaky elevators.

But also driving the makeovers is the need to keep existing tenants and attract new ones — especially companies courting members of the millennial generation.

"Tenants are all trying to get the bright-eyed recent grads of the top schools that come out with an MBA or the tech credentials they're looking for,'' said Larry Feldman, whose Feldman Equities is a co-owner of the Wells Fargo Center. "A better, edgier space sometimes gives employers the edge in appealing to the younger, upwardly mobile type that typically wants to be downtown, not in the ticky-tacky suburbs.''

Along with downtown St. Petersburg, downtown Tampa has become the area's hottest office market. That has sparked a major push to make older buildings like the Wells Fargo Center, built in 1985, competitive with Tampa's top three office towers — the much newer Bank of America, SunTrust and 100 North Tampa buildings.

After Feldman and Tower Realty Partners bought the Wells Fargo Center in early 2013, they embarked on a $4 million-plus series of renovations that include a high-end fitness center with showers and almost $100,000 in new equipment.

People who work in the building pay just $5 a month, far less than they would at a gym outside. It's not only a bargain for users but a good recruitment tool for employers.

Another selling point is the new Corner Cafe, which replaced a nondescript delicatessen.

"It looked like a thousand delis you've seen in a thousand office buildings all over the country where you slide a tray along a metal pipe rail and a guy slaps the food on a plate,'' Feldman recalled.

In its place is an airy, contemporary eatery with an extensive menu and seating to suit almost every taste — low-slung banquettes, counter height stools, faux-leather chairs with little swivel desks on which to prop an iPad.

To brighten and open up other areas, dark wooden doors are being replaced with glass ones. Old ceiling panels have been removed, raising ceiling heights to 13 feet and giving a hip, loftlike feel.

And in the elevator banks, '80s-style marble flooring has been replaced with pure white porcelain tiles that are so glossy they reflect the new energy-efficient LED lights overhead. The elevators themselves are being programmed to automatically go to certain floors at peak-demand times, "like when 20 people take a coffee break on the 12th floor at 2 p.m,'' Feldman said.

The result of all these upgrades? In the past three years, the occupancy rate at the Wells Fargo Center has jumped from 75 percent to 93 percent. As the building rivals newer ones in quality, it will be able to command higher rents.

"The strategy was to combine extensive renovations with an aggressive leasing program so we were actually undercutting the market for a while,'' Feldman said. "On the remaining space we have, which is about 20,000 square feet, we are going to be raising rents but still compared to the top three be cheaper.''

A few blocks away, Tampa's oldest office tower, the 36-story Park Tower, has also been undergoing a multimillion-dollar facelift since it was purchased in 2006 by a partnership between Colliers Arnold and Sterling American Properties.

Built in 1973 and now a regional headquarters of BB&T, it is among several bay area office buildings to recently add a Nature's Table cafe with vegetable smoothies and Thai rice bowls — the kind of healthy fare favored by urbanized millennials.

Tampa "is definitely following the national trend where the migration is to downtown for the live-work-play experience,'' said Claire Calzon, the tower's managing director of office services. "We just need to stay competitive to keep tenants and capture new tenants."

Calzon recently leased space to a food broker who moved his company from Clearwater after buying a condo in downtown Tampa. "They wanted to be able to walk to work, and that's why they chose the Park Tower,'' Calzon said.

Another place where '80s era office buildings are getting substantial makeovers is Rocky Point, at the eastern end of the Courtney Campbell Causeway.

Since buying the 12-story Island Center two years ago, Parmenter Realty Partners has spent close to $4 million on improvements that include a revamped deck and outdoor seating area with sweeping views of Tampa Bay.

Tenants appreciate the changes. "It's enjoyable to come to work and look at the water,'' said Bryan Delligatti, 38, who recently joined an IT staffing and consulting company with space in the building. "I watch the sunrise, I use the gym. It's a home away from home.''

Older office buildings in downtown St. Petersburg, where occupancy rates are nearing 90 percent, are also being spruced up. The waterfront City Center, built in 1985, recently added a Nature's Table with couches and banquettes. The Morgan Stanley Tower, the same age but a few blocks farther north, is gaining a fitness center.

Feldman, whose company and Tower Realty own both buildings, expects the upgrades there and in downtown Tampa to increase occupancy rates and with them, rents.

The possible result: For first time in years the bay area could get a new office tower, providing fresh competition for all the aging ones trying to look more youthful.

"When rental rates rise sufficiently, they support new construction,'' Feldman said. "If office rents continue to rise, it's possible there will be new development, but I don't think it's going to be the speculative development like in the '80s. The view then was 'build it and they will come.' I think future development will occur when a major tenant is willing to prelease 100,000 or 200,000 square feet.''

Contact Susan Taylor Martin at [email protected]

 
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