Several new workspace options will take their place in St. Petersburg in the coming months.
WorkLodge is on target to open its coworking and private office facility at 136 4th St. N. in April, said Dan McLean, one of the partners who will own and operate the WorkLodge franchise in St. Petersburg.
Novel Coworking expects to open its downtown St. Petersburg space in the Synovus Bank building in the fourth quarter of 2020.
A Station House annex at Sundial St. Pete plans to open this year, with another coworking space by Gianco Companies, which owns Station House, slated for The Edge Collective, a mixed-used project by PTM Partners in the EDGE District that’s scheduled for completion in the first quarter of 2022.
Coworking, and more broadly shared or flexible office space, is viewed as one solution to an office shortage in St. Petersburg, where more than 90 percent of Class A office space downtown is occupied. Although more than 300,000 square feet of new office space is planned in the next few years, it won’t be enough to keep up with demand, city projections indicate.
Nationally, flexible office leasing dropped in both the fourth quarter and full year of 2019, in part because of WeWork’s pullback in leasing after its failed initial public offering, a report from CBRE said. However, the Tampa-St. Petersburg market posted a 739 percent gain in flexible office leasing last year, the report said.
No sign of a slow down
Coworking and shared office space is a smart business move, said Kris Elliott, chief operating officer for Novel Coworking, a Chicago-based company that offers coworking and office space to businesses.
“Twenty years ago, people used to apologize for having to be in what we called an executive suite at the time. It meant you couldn’t afford your own office … But the tide has shifted to where coworking is a smart business decision for any company in any financial stage of their business,” Elliot said. “People are choosing coworking to be with other people. We’re leveraging relationships with other businesses inside of the coworking spaces and doing business with each other. It becomes a smart way to do business even if you could afford to buy your own building.”
It also is a flexible option for growing companies, she said.
“Who can guess how big they will be in five years, two years, two months. The coworking model allows you to contract or expand at a rate that works for your business.”
Novel looks closely at fast-growing markets, and St. Petersburg checked all the boxes, Elliott said.
“St. Petersburg has a very robust economy. The economy is driven by healthcare, government, finance and technology, some of the sectors we look at,” Elliott said. “We looked at the existing coworking competition in the market, which we found has low vacancy and high market rates. And we looked at a low unemployment rate of 3.1 percent with a lot of net migration into Tampa-St. Pete. It’s showing no signs of slowing down.”
The company’s business model is different from most others in the shared office space industry. Novel buys buildings and develops them into coworking and private office space.
It bought the Synovus Bank building at 333 3rd Ave. N. on Feb. 18 for $6.9 million and plans to develop the second, third, fourth and fifth floors, outfitting the space with 67 offices and 10 SmartSuites, which are technology-enhanced private suites. Synovus Bank will remain on the first floor.
Take a look at Novel’s other properties in the gallery below.
Owning property is what distinguishes Novel from other shared office companies, Elliott said.
“We don’t have to pay a high price to a landlord, be a tenant and then re-rent the office in smaller sections to the clients. We are the landlord so we cut out the middleman and pass savings along to clients,” she said.
It also gives the company the ability to do anything it wants for its clients, such as including a mother’s room and a bike room providing a safe and secure place for bicycles. Novel has a wellness focus; in addition to supporting people who bike to work, it encourages clients to take the stairs.
“A lot of the executives in our company are women and we think about the things that we wish we had in an office building back in the day. Then, because we own the building, we put those things in the building. We don’t have to ask anybody, we just do it. We do it because it’s right for our clients, and we’re going to do it in St. Pete because that market is really hungry for something like what we know we’re going to provide,” Elliott said.
The building will be one of a handful of Novel properties to have a rooftop event space, for use by clients and for community events. “We’re launching an events business as part of our national growth plan, so we will open six rooftops this year and St. Pete is one of those,” Elliott said.
The company expects to start pre-leasing in August or September. The goal is to be 30 percent to 40 percent occupied when the building opens in the Q4 2020. Elliott expects to be fully leased in six to nine months.
WorkLodge is a Houston-based company and its St. Petersburg location at 136 4th St. N. is its first site outside of Texas. WorkLodge will occupy about 28,000 square feet on the second and third floors of the building, with about 3,000 square feet for coworking and 18,000 square feet for private offices, as well as event space and conference rooms.
About 43 offices on the second floor will be ready for move-in the first week of April, McLean said. Another 50 offices on the third floor like will open in late April.
WorkLodge has started offering tours of its space and began pre-leasing this week. The space is getting a positive reception, McLean said.