MIAMI—When construction slows, demand rises—at least in theory. While 1.1 million square feet of newly-built office space in Downtown Miami sat mostly dark after the Great Recession, most Florida cities didn't have that level of overbuilding.

The Tampa Bay area, particularly the Westshore submarket, has been one of the hotter office markets in the state—and is not subject to overbuilding. In fact, there's no new construction underway on the office front. GlobeSt.com caught up with JLL's Brent Miller to get his thoughts on the ripple effect in part one of this exclusive interview.

GlobeSt.com: There are currently no new office projects under construction in the Tampa Bay area, how is this affecting rental rates and activity among class A and class B buildings?

Miller: The most visible impact the lack of new construction has had on the office market in the Tampa Bay area is that rental rates are steadily increasing. JLL's 2016 Skyline found that downtown office rents are increasing 6.3% year-over-year and 14.4% in the last 24 months alone.

While this is good news for landlords, the market will need to start delivering new product if it plans to remain competitive on a regional and national level. There is a substantial opportunity cost if no new product is delivered within the next 18-24 months. Tampa could lose the opportunity to attract large employers and retain corporate growth if the market cannot supply the large, contiguous blocks of space that a larger company would require.

On a positive note, we are seeing increased activity in both class A and B office space as demand keeps growing. While class A space is slightly more active than class B, both have been positively impacted by the current market conditions.

GlobeSt.com: There are currently multiple large users that are new-to-market touring the Tampa Bay market, what is unique about Tampa that is appealing to these larger companies?

Miller: The Tampa Bay region is tremendously “corporate friendly” as the costs of doing business, including overhead, land and taxes, in this region are very competitive. Lower occupancy costs, combined with Tampa's warm climate, proximity to water and superior quality of life make the region a very attractive option for large companies.

We have also found that these new to market companies have been surprised at the diversity of Tampa's workforce. Unlike some of the cities and regions that we compete with, Tampa Bay has a very diverse population with a wide demographic range.

According to the Tampa Bay Partnerships Center for Business Intelligence, 35% of the population has a bachelor's degree or higher and another 21% has some type of college education. With an average household income of $63,020, Tampa Bay employers have access to a well-educated and skilled talent pool.

Orlando is also seeing traction on the office front, posting a landmark office park trade at the end of the year. Want more insight? Here's five Florida regions to watch in 2017.

GlobeSt.com: There are currently no new office projects under construction in the Tampa Bay area, how is this affecting rental rates and activity among class A and class B buildings?

GlobeSt.com: There are currently multiple large users that are new-to-market touring the Tampa Bay market, what is unique about Tampa that is appealing to these larger companies?

Orlando is also seeing traction on the office front, posting a landmark office park trade at the end of the year. Want more insight? Here's five Florida regions to watch in 2017.

Instant Insights /

How No New Construction Is Impacting This Hot Office Market

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