Office Property Sales & Trends | May – June 2020
A look at macro and micro trends including my monthly Tampa Office Sales Comps Report
The Big Picture
As we move into the second half of this unprecedented year, more companies are starting to make decisions and moves to accommodate the new workplace reality. Just this week, Pinterest announced the termination of its 490,000 SF lease in San Francisco. The surprising move resulted in a one-time $89.5 million payment. The large payment seems an indication of the company’s long-term commitment to a new strategy.
I don’t expect that Pinterest will be the last to make such a bold move. We’ll soon start seeing multiple companies, some born from this pandemic, take up former one-tenanted space as more organizations make decisions about their workplace structures.
Look for larger, more regional companies to adapt the hub-and-spoke model that will bring office space to the suburbs, closer to where employees live, to accommodate hybrid work-from-home and work-from-the-office models. I’m already hearing how many workers are looking forward to splitting their time between their home and workplace offices giving them the best of both worlds.
As we go forward, we’ll see more transactions with companies jumping at the chance to take the place of prime CBD real estate at discounted prices with the potential for suburban space to see greater demand.
Zooming In to Tampa
Zooming in to the Tampa office market, the latest sales data shows that the total transaction volume in Tampa for June of this year was $17,739,000.
Compared to $66,800,100 in June of 2019, this reflects an approximate -73.4% YOY decrease.
However, the market may be attempting to adjust. May was the first month of YOY increase in transaction volume we have seen since the beginning of the public health crisis in mid-March of this year.
Total volume in May was $21,942,000 versus $6,661,500 in 2019–an approximate 229% YOY increase.
In June, the highest sales price was $10,350,000, which was achieved by a professional office property.
📌 3350 Buschwood Park Dr. Property specs:
- Built-in 1989
- 78,446 SF
- 7.6 Acres
- $131.94 Price/SF
PROFESSIONAL & MEDICAL OFFICES: PRICE/SF
- The AVG $/SF for June 2020 was $214.75. When compared to June 2019’s AVG $/SF at $528.58, we see a YOY decline of – 59.4%.
- May 2020 also exhibited a decrease in AVG $/SF. In May of this year, the AVG $/SF was $143.28. In 2019 it was $204.54, a -30% drop YOY.
MEDICAL OFFICES: PRICE/SF
- Two out of the 10 transactions in June were for medical offices. One in Tampa and the other in Valrico selling for $252.20 and $202.92 $/SF, respectively.
For more market insights, including May & June Year-Over-Year analysis, download the Tampa Office Sales Comps & Report below or reach out to me for more information on the local market!