In office, hybrid or at home? The future of ‘the office’ in Tampa Bay

One real estate firm predicts most employees will come back to the traditional office setting in the next three to nine months.
Water Street Tampa pictured on Wednesday, Jan. 19, 2022.
Water Street Tampa pictured on Wednesday, Jan. 19, 2022. [ IVY CEBALLO | Times ]
Published March 25, 2022

The pandemic changed the way we worked the last two years, and Chris Steinocher believes the change for many is permanent.

“COVID-19 has allowed people to define where they want to be and how they want to work,” said Steinocher, president and CEO of the St. Petersburg Area Chamber of Commerce.

Steinocher believes some large companies are rethinking whether to bring their people back to the office completely. “They realized their employees can do the work outside of the office,” he said. “And they now have found that real estate that they’re holding onto, that investment can be used in different ways.”

Several companies have told employees that they can work from anywhere, he said. Many of them have moved to St. Petersburg.

“Our chamber is seeing and our community is seeing so many wonderful new faces,” Steinocher said. “Their office is in New York, but they’re at our events because they want to grow their professional skills and meet other people.”

Brent Miller, managing director of the Tampa Bay market for JLL commercial real estate firm, said large corporations are adopting a hybrid model, “meaning it might look a little different in that employees might not come back five days a week.”

John Przedpelski’s company caters to those working remotely who want office space for themselves. He owns two Office Evolution franchises in Tampa. The company rents out private offices, conference rooms, co-working space and day offices.

His business, too, saw a decline in demand during the worst of the pandemic, but he said since summer it’s started to pick back up again.

“It’s really coming from two things. One, from people that were afraid to go into the office are now coming back into the office, and as well as some larger companies are creating satellite offices for their businesses for people that, they want to work from home but they don’t necessarily have the facilities to work from home, so it’s kind of a work away from home,” Przedpelski said.

JLL released a report late last year that predicts most employees will come back to the traditional office setting in the next three to nine months.

“We are finding the majority of employers are encouraging — not mandating yet, but we do believe that will come, that the majority of the employees will be back in the office,” Miller said.

It’s beginning to happen. Miller said six months ago office occupancy in the Tampa Bay market was at about 40 percent. Now it’s more than 50 percent. And significantly, companies are still holding on to their office space. Miller said 82 percent of the office space in the Tampa Bay market has been leased.

Looking toward new construction at Water Street Tampa, Tuesday, Nov. 30, 2021 in Tampa.
Looking toward new construction at Water Street Tampa, Tuesday, Nov. 30, 2021 in Tampa. [ MARTHA ASENCIO-RHINE | Times ]
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The report stated that in the last quarter of 2021, the net absorption — the amount of square feet physically occupied minus the amount vacant — was about 365,000 square feet for the Tampa Bay region. In Tampa’s central business district, the end-of-the-year surge of tenant move-ins pushed the quarterly absorption to more than 176,000 square feet, “the highest on record.”

A lot of that demand for space is driven by new companies moving into the area.

“I would just say that the Tampa Bay market in general is seeing more activity from outside corporations now than it really ever has. It’s almost like a poorly kept secret that’s been let out,” Miller said.

Mike DiBlasi, managing director of the Florida west coast region for CBRE commercial real estate firm, said companies are willing to pay higher rents, too. He noted that the office building that opened last summer in Water Street Tampa downtown, called Thousand & One – 1001 Water Street – is commanding the highest rents ever seen in the region, in the mid- to upper $50s per square foot.

“And companies are happily paying that rent,” he said.

Noting the benefit of workers being together, DiBlasi said the Tampa office of CBRE recently relaxed some of the restrictions on coming in, and he’s seeing a significant increase in employees coming back to the office.

“Our industry’s a team sport, and for that reason, we see a lot of our teams coming in as a whole on a daily basis because they recognize the value of being around each other to spark creative ideas, to collaborate on how to service our clients and secure new business, and those things are hard to do when you’re sitting at home and everybody’s trying to coordinate a Zoom call or making phone calls to each other all day,” he said. “Those organic conversations, if you will, that take place in an office on a daily basis, a lot of times those are the things that spark future opportunities.”

And the company tries to make it a fun environment for employees.

“We had a pretty cool event last week to kick off our year, a Disney-themed event with Mickey Mouse as a special guest,” DiBlasi said. “So I think doing things like and other ways to drive people into the office is our focus.”