ORLANDO—Are any large tenants moving into the market that could put a dent in vacancy rates? If so, when are they arriving and where are they leasing? And, who is investing more in office buildings?
GlobeSt.com caught up with Clay Wommack, director for Franklin Street’s Office and Industrial Division, to get some answers to these and other questions in part two of this exclusive interview. You can still read part one: Sophisticated Landlords Are Doing This.
GlobeSt.com: Are any large tenants moving into the market that could put a dent in vacancy rates? If so, when are they arriving and where are they leasing? And, who is investing more in office buildings?
Wommack: Tampa has been very fortunate in seeing many new tenants once again entering the market. Johnson & Johnson has committed to a large block of space—over 100,000—in the Interstate 75 East Tampa market.
The most dominant trend, however, has been existing tenant expansions and existing tenants bringing other divisions within their corporate structure to the Tampa market. In terms of office building investments, we have seen a significant increase in institutional money.
GlobeSt.com: Most of the absorption seems to be taking place in the Tampa CBD. What are the next submarkets to show marked improvement? Do we anticipate more buildings changings hands in the latter part of this year?
Wommack: The CBD has done well in the past two years. However, it lacks a variety of large block spaces.
Many tenants now in the 25,000- to 30,000-square-foot range are having to look in submarkets outside of the CBD and Westshore area. Again, the Interstate 75 East End Market has been the most active due to product availability.
As for the buildings, there are currently two major assets under contract that are expected to close within the next two months. The investment activity in Tampa and Saint Petersburg has been fierce this past year and I think most of the sale activity is slowing.
GlobeSt.com: What incentives are landlords offering to retain tenants? Conversely, what incentives are landlords using to lure tenants from other properties?
Wommack: Concessions have dramatically decreased as the market has become more of a “landlord’s market.” This is due to positive absorption and a reduction in space alternatives for tenants. Good quality, sought out tenants can still expect to see a few months of free rent depending on the other deal terms.