TAMPA—Tampa office tenants with leases nearing expiration are faced with a two-fold problem: limited options and increased rental rates. What's the answer to the current state of the market? Landlords and tenants alike are exploring options for quality “like new” affordable office space.

So says Clay Witherspoon, a principal and managing director in Avison Young's Tampa office. With no new office buildings on the market and demand for office space causing rental rates to increase, Witherspoon tells us the reason behind this dilemma—business growth in Tampa—looks positive.

However, this is not necessarily welcomed news for class B tenants. That's because companies renting class B office space in Tampa are competing for quality employees and seeking  attractive workplace environments help the cause.

“The tapestry and cadence of today's work environment is still evolving from recent economic turmoil,” says Witherspoon. “With climbing leasing rates and decreasing vacancy in newer class A buildings throughout the Tampa Bay area, the trend for this market of small- to mid-sized companies seeking the best opportunities for growth is a 'flight to quality' as opposed to 'flight to new'.”

What's the solution? Create a new category, according to Witherspoon.

As he sees it, owners are investing in their buildings to strive to be the best quality product in its class. That means traditional class B would now be a “B+”. This appeals to the tenant looking for an “A” status building through upgrades, but still falls within the budget of a small to mid-sized class B tenant.

“Changes in space and utilization requirements along with a new demand for overall property activation is something tenants are demanding and ownership is navigating,” Witherspoon says. “Requirements we are seeing are that buildings incorporate technology, offer shared spaces to work in common areas, and provide better dinning and lifestyle options to relive stress on the workforce and clients.”

Witherspoon also reports the class A office sector is experiencing advanced market absorption. That, coupled with the lack of new space coming online, is motivating ownership groups of class B and mature A properties to take advantage of and leverage nimble options for attracting new tenants. And that is creating a new class of B+ and A- office properties.

“Westshore Center, located at 1715 North Westshore Boulevard, is an example of a mature A property that has recently undergone extensive renovations and has seen tremendous gains from it,” Witherspoon says. “The building—now 90% occupied—has experienced a 6% jump in occupancy in less than six months.”