L3’s move to downtown St. Pete tops tech office space deals

A move by L3 Technologies to lease 60,000 square feet of Class A office space in downtown St. Petersburg ranks No. 1 for tech office space deals in the Tampa-St. Pete area.

The deal tops the list in CBRE’s 2019 Scoring Tech Talent report, which provides a snapshot of how the 50 largest markets in the U.S. and in Canada perform in innovation, economic and real estate growth.

Overall, Tampa-St. Pete ranks No. 29 out of the 50 markets, up two spots from last year’s report.

Among small markets — those with a tech talent labor pool of less than 50,000 workers —  Tampa-St. Pete is ranked No. 1, with 49,120 workers, a 27.6 percent increase between 2013 and 2018. In contrast, total non-technology occupations grew at less than half that rate, 12.8 percent between 2013 and 2018.

“Tightening availability of tech talent in leading markets has spurred hiring momentum in smaller and upstart markets … as expanding tech employers seek additional labor pools,” CBRE said in a news release about the report.

Computer and information systems managers saw the biggest occupational gains, with growth in that job category up 84.4 percent in five years. Technology engineering-related jobs fell by 18.8 percent between 2013 and 2018.

The number of total tech degree completions jumped 37.8 percent between 2012 and 2017. Among local tech workers, 75 percent were male and 25 percent female, the report said.

The high-tech industry accounted for 20 percent of major office-leasing activity in this year’s first quarter, the most of any industry, CBRE said. The tech industry’s growth has left little available office space in large or small markets, with vacancy in single-digit percentages in the tightest markets. That includes Tampa-St. Pete, where vacancies were at 9.8 percent in the first quarter of 2019.

That scarcity of available space has pushed up rents. In Tampa-St. Pete area, the overall asking rent was $23.10 per square foot, up 16.3 percent since Q1 2014.

The L3 Technologies move cited as the top tech office space deal in this year’s report took place in the past few months. The company, which supplies security and detection systems for aviation, transportation, government and critical infrastructure, consolidated locations in Sarasota and St. Petersburg and moved to a new office at 490 1st Ave. S., in the Tampa Bay Times Building. L3 signed a long-term lease for the 5th and 6th floors and part of the first floor, according to a news release from Franklin Street, the commercial real estate company that arranged the lease.

The firm, which has since merged with Harris Corp. and now is called L3Harris Technologies (NYSE: LHX), relocated more than 200 employees to the new space and modernized its operations in St. Petersburg.

It was drawn to the area because of factors such as housing and walkability that appeal to a millennial workforce, said Scott Stahley, executive vice president of Lincoln Property Co., which owns the Times building. He was speaking at the State of the Economy presentation earlier this year.

The CBRE report singled out two other real estate deals: NexTech Systems, which took 30,000 square feet at 4221 W. Boy Scout Blvd. in Tampa, and Datalink Software, with 26,100 square feet at 14055 Riveredge Dr.  in Tampa.

See the full report here.