New commercial and residential development is at the forefront of Hillsborough County’s expansive population growth. Residential developers have acquired large tracts of land around the major population centers, and current and planned construction is pushing out to the boundaries of the county.
Flourishing residential communities such as FishHawk Ranch, Magnolia Park and Waterset are providing an amenity-rich suburban lifestyle and driving the development of retail centers and service establishments. In Tampa’s downtown district, new residential projects are flourishing in response to the exponential population growth that is occurring in the urban center. The surrounding districts including Channelside, Harbour Island, Hyde Park, Tampa Heights and historic Ybor City are all benefiting from this urban movement and contributing to the growing downtown workforce.
A steady resurgence in the metro job growth has created new momentum for commercial development in the Tampa Bay area. The demand for space comes from a wide spectrum of industry sectors and reaches across all property types.
Solid job growth, particularly in finance and professional and business services, is driving demand for Tampa’s office space. Strong market fundamentals are attracting the interest of real estate investment groups that see opportunity In Tampa’s office properties. Particularly in Tampa’s Central Business District (CBD) and the Westshore district, a number of Class A office properties have been acquired by new owners who are eager to revitalize these assets with multi-million dollar renovations. Added perks such as free Wi-Fi and outdoor courts are part of the modernization plan and efforts to attract new workers, especially the millennial generation.
Corporate expansions are driving recent additions to Tampa’s skyline. In October 2015, financial services giant USAA welcomed its first employees to its new corporate campus at the Crosstown Center in east Tampa. The state-of-the-art 261,000 square foot office facility was built to accommodate the company’s expansion of 1,215 jobs over the next five years. Fast forward just two years, and USAA announced plans to expand its operations with another building at the same location. The new 240,000 square-foot office building will open in early 2019 and USAA expects to hire an additional 1,000 employees for a mix of financial services positions covering insurance, banking and mortgage. The Crosstown Center campus represents a $164.3 million investment and is the largest build-to-suit office project in Hillsborough County since 2001. USAA also operates a half-million square-foot center at Commerce Park, in New Tampa, which opened in 1993.
Laser Spine Institute, a local company founded in 2005, has experienced meteoric growth in the field of “minimally invasive spine surgery. In the spring of 2016, Laser Spine Institute (LSI) began the move-in at its new $56 million headquarter office in Avion Park near Tampa International Airport and created about 100 new jobs in the process. The new 176,000-square foot six-story office contains surgical facilities and office space for LSI’s headquarters operations and support staff for its regional surgery centers in other locations.
New office development is a significant component of mixed-use projects which are moving forward, especially in downtown Tampa and the surrounding areas of Channelside and Ybor City.
Steady job growth, which includes the construction and manufacturing sectors, and a resurgence in the housing market is fueling the demand for industrial space in the Tampa Bay market. The emergence of larger tenants on the hunt for space is driven primarily by two factors – the need for facilities consolidation and the demand by distributors and retailers for expedited delivery.
In September 2014, e-commerce leader Amazon opened its one-million square foot fulfillment center in Ruskin and now employs approximately 2,500 workers to staff its packing and distribution operations. Earlier the same year, Amazon opened a similar-sized fulfillment center in Polk County. These massive distribution centers were constructed to fuel the company’s need for efficient service to the major population centers encompassing Tampa and Orlando. This trend will continue to drive future industrial development in Hillsborough County.
Strong growth of existing businesses has also has been a factor in Tampa’s industrial development. In 2014, Dart Container Corp. constructed a new 400,000 square foot distribution center to accommodate expansion of its Plant City operations. Dart, the world’s largest manufacturer of foam cups and containers, acquired the Solo Cup Company and needed the new facility to handle its expanded product lines. Another Plant City company, James Hardie, a major supplier of siding and other building supplies expanded its operations in 2014 with an additional 100,000 square feet of manufacturing space. Including the additional machinery and equipment, the company invested a total of $80 million to double its production capacity.
Improving market conditions have fueled new speculative development of industrial product. In east Tampa, EastGroup Properties is completing its Madison Distribution Center development, a four-building complex totaling 275,000 square feet. Elsewhere along the I-75 corridor, there is a strong push for new industrial facilities – both speculative and build-to-suit. Among these new developments are Grand Oaks 75 Business Park, 301 Business Center and Crossroads Commerce Center. All of these projects feature Class A amenities that are in demand by today’s logistics and distribution companies looking to establish or upgrade facilities in the Tampa market.
In Plant City, Central Florida Development added its second 100,000-square foot distribution center at County Line Commerce Center and has pads available for smaller build-to-suit office or industrial projects. The Plant City submarket also has a significant inventory of land sites with entitlements in place for future industrial development. Included among these sites are Lakeside Station Logistics Park, County Line Central Park, Central Florida Commerce Center and County Line Logistics Center – combined, these projects offer entitlements to accommodate over 7 million square feet of new industrial development.
Among the major retail brands that have found a home in Hillsborough County are Ikea, Bass Pro and Trader Joe’s. Brand names are attracted to the Tampa Bay area due to its population diversity and a mix of urban and suburban neighborhoods containing a wide range of age and economic demographics. These are among the reasons that the Tampa Bay market has proven to be a successful launch pad to test market new products and services. The evolution of the first Outback Steak House in Tampa into one of the world’s largest casual-dining companies, Bloomin’ Brands, Inc., is a prime example.
A handful of major new developments proposed in and around Tampa’s Central Business District will eventually transform the city and create an urban environment unlike any other in the country. In summary, here are the major proposed developments:
Channelside Waterfront District:
Est. Development Value: $2 billion
Developer: Strategic Property Partners LLC
Project Site: 40 acres
Proposed Space: Hotel, retail, office, residential, public spaces
Channel District Vision Plan:
Est. Development Value: $1.5 billion
Developer: Port Tampa Bay & private investors
Project Site: 45 acres
Proposed Space: Residential, office, retail, hotel, central park
Est. Development Value: $820 million
Developer: SoHo Capital
Project Site: 39 acres
Proposed Space: Residential, hotel, office, retail, market hall
Est. Development Value: $500 million
Developer: Bromley Companies
Project Site: 1.8 million square feet
Proposed Space: Mixed-used retail, entertainment, residential, office, hotel
West River Redevelopment Plan:
Est. Development Value: $500 million
Developer: Tampa Housing Authority, Related Group
Project Site: 150 acres
Proposed Space: Mixed-income & market rate residential, retail, office
At the doorstep of Tampa International Airport, the Westshore business district stands out as the state’s largest suburban office market with over 12 million square feet of office inventory. The Westshore district is also home to a vibrant 24/7 community and boasts some of Tampa’s finest restaurants, world-class shopping, extraordinary hotels and vibrant residential neighborhoods. Westshore’s area wide Development of Regional Impact (DRI) provides significant entitlements for office, retail, hotel and residential development for many years into the future. Also, the Westshore Overlay District Development Standards have been instituted to provide flexibility in the development process and to allow greater density without the need to rezone property. A number of office developers, such as Highwoods Properties, Cousins Properties and MetLife Real Estate Investments, control prime sites and can provide turn-key solutions for build-to-suit requirements in Westshore.