What Kinds of Companies Are Driving Office Leasing?

MIAMI—There's been a big resurgence in the office market beyond Miami. So says JLL's John Gilbert, managing director responsible for overseeing the office leasing for the firm's portfolio in Orlando, Tampa and Jacksonville.

GlobeSt.com caught up with Gilbert to get insights into why these three markets, far north of South Florida, remain a cost-efficient location for companies in part one of this exclusive interview. Be sure to come back to this afternoon's Miami edition, where Gilbert will offer advice for young professionals.

GlobeSt.com: As JLL continues to expand its footprint in agency leasing across Central and Northeast Florida, what are some of the office market trends you're seeing?

Gilbert: We're seeing a big resurgence in the office market across Orlando, Tampa,  and Jacksonville, particularly on the investment side. This past year, these markets experienced an increase in the number of office buildings acquired by regional and national investment groups and leasing activity has also been rising steadily.

With the prices for office buildings in major US markets typically favored by investors reaching record levels, investors are turning their attention to smaller real estate markets with significant potential such as Tampa, Orlando, and Jacksonville. Over the past year, we've seen a huge turnover of ownership in Central Florida and an increase in outside investment that is expected to continue this year if interest rates remain low.

GlobeSt.com: As new public transportation projects in all three markets come online, how will these investments change the office market in Central and Northeast, Florida?

Gilbert: In all three markets, new transportation infrastructure projects and improvements will be a major source of convenience for businesspeople. From SunRail in Orlando and new interstate infrastructure completed in Tampa to a new bus rapid transit system breaking ground in Jacksonville, this investment in infrastructure and transportation improvements is expected to drive additional commercial investment in the areas surrounding the stations and along the major thoroughfares. Access to the major roadways and connectivity are key for new development across asset types, including office, retail, and industrial.

GlobeSt.com: What kinds of companies or groups are you seeing driving the office leasing market?

Gilbert: While each office market has different drivers, we're seeing more companies relocate their back-office side of operations to take advantage of the tax incentives and cost efficiency of operating their business in the state of Florida. One example is Tampa, where national financial services firms are moving their back office operations previously in in the Northeast.

Large governmental organizations are also setting their back office operations in Jacksonville. In Orlando, the rising tech scene is also driving demand for office space from younger companies that are looking to grow in Central Florida and some are gravitating towards shared office spaces.