Report: Healthcare Ruling to Benefit Tampa Bay Office Market

TAMPA, FL—The healthcare industry helped sustain the Tampa Bay area through the Great Recession. Now, the Patient Protection and Affordable Care Act, also known as Obamacare, could continue to push that trend forward.

A special healthcare report from Jones Lang LaSalle predicts the healthcare sector to continue leading the Tampa MSA’s labor market growth. The JLL forecast suggests that the sector’s employment growth could average 4%, while the metro’s total payrolls will see averages of growth, but at slower rates of 1.4%.

“Over the past six quarters, the back-office operations that support the nation’s largest insurers, like Humana and WellCare, as well as third-party companies, have seen employment gains and are absorbing more office space,” Stephen Siena, a research analyst at JLL. “It seems reasonable that Obamacare will increase the number of people with health insurance by about 20% in Florida and that should have a huge impact on insurer’s business models.”

Historically, healthcare back-office operations tenants have made up only 11.8% of the total office market in Tampa Bay, but the past two years has seen rising demand account for 22.5% of all leasing volume. These numbers should persist as Obamacare expands coverage to an additional 32.5 million people.

Siena points to recent signs of growth, with some of the second quarter’s most significant deals involving healthcare companies. WellCare Health Plans’ inked a 66,000-square-foot expansion at Premier North Corporate Center I, EmCare’s signed for a 18,000-square-foot expansion at Harbourside and Healthesystems’ agreed to a 50,000-square-foot renewal and expansion at Centrepointe.

“A lot of the movement that we are seeing is with big groups like Humana that are upgrading their space,” Siena says. “That’s a huge opportunity for the new product that came on the market. Tampa Bay can now back fill the space that came to market in 2009 that never saw much demand.”

The JLL report notes that many of the healthcare back-office operations in Tampa Bay are not just servicing Florida, but also large portions of the United States. So beyond an uptick in leasing, JLL predicts new development in both centralized and outlying areas of Tampa Bay.