An even tighter market: Downtown St. Pete’s office vacancy falls below 4%
Downtown St. Petersburg has garnered an extraordinary amount of attention this past quarter as companies relocate or grow within the city, but finding more space is going to be an uphill battle.
This quarter, the vacancy rate in downtown St. Peterburg dropped below 4% – the lowest it has ever been, according to Mack Feldman, Vice President with Feldman Equities, a commercial real estate development firm with office properties in Tampa and downtown St. Pete including the First Central Tower, the Castille at Carillon and the Morgan Stanley Tower.
“It’s wonderful to get pre-leasing in the market. We didn’t see this much traction until we saw activity start happening around Tampa Bay with the Heights Union and Water Street,” Feldman said. “The downtown St. Pete market is very limited now.”
The average price per square foot is around $32 to $36 for Class A buildings in downtown, such as the Northern Trust building, the Morgan Stanley Tower, the First Central Tower and 200 Central.
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The 200 Central building is fully occupied and a lease was recently executed with ARK Invest, which plans to move into the 10,000-square-foot space next year.
While most of the buildings are near full occupancy or fully occupied, there’s some stretch room with pockets of potential subleases.
Real estate experts say tenants in downtown who have initiated hybrid models could make a pivot to completely operating remotely.
While it may be a year or so, there are several projects underway in the city that would provide over 150,000 square feet of additional office space once they come online:
Orange Station at the Edge: The mixed-use development at 1301 1st Ave. N. will feature 50,000 square feet of Class A office space and a build-to-suit opportunity. DDA Development, Backstreets Capital and partners broke ground on the development in October. It’s expected to be completed in late 2023.
400 Central: New York billionaire John Catsimatidis Sr., of the Red Apple Group, is building the 46-story tower at 400 Central Avenue. While the emphasis has been on condos for the development, the tower will have roughly 45,000 square feet of flexible office space. The project is expected to take three years to complete.
Maritime and Defense Technology Hub: The St. Petersburg Innovation District now controls the former SRI International building, which it is making into a marine and defense tech hub. The waterfront facility is located at 450 8th Ave. SE and contains 32,386 square feet of space. About a dozen companies currently make up the Hub, filling about 80% of the building.
Tampa Bay Innovation Center: The 45,000-square-foot innovation center in St. Pete.will be the first in Pinellas County purposely constructed to focus on entrepreneurs. It will be located on 2.5 acres of city-donated land at 4th Street and 11th Avenue South in the Innovation District. There will be 30,000 square feet on the first floor for incubator companies; the other floor will be for ARK as the anchor tenant. The spaces will be leased as Class A office spaces. Center executives said they are working with a second large tenant. The group hopes to start construction in 2022 and expects the center to be completed in July 2023.
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