I know the Tampa office market. In the past 17 years, I’ve successfully guided hundreds of landlords, office owners, and medical real estate investors through the dynamic Tampa Bay commercial market.
What I’ve learned is that while investors buy commercial property for passive income, ownership should be anything but passive. A successful property requires attention, understanding, and a strategy-based approach to succeed. This is even more important in today’s market where shifting dynamics in Tampa and across the commercial property space are playing an increasingly important role in use, value, and marketability.
In this article, I will share 10 topics to understand when owning an office building or during the purchasing period in Tampa, FL.
Understand Tampa’s market dynamics
Tampa Bay’s commercial real estate market, specifically office buildings and medical real estate, is vibrant and growing. Understanding what impacts supply, demand, rental rates, and vacancy trends is crucial for office property owners. In addition, seeing how those trends affect property values and lease rates on a month-to-month basis is essential to offering a competitive lease product, terms, and rates.
To help property owners stay ahead of the market, subscribe to my monthly newsletter where I offer monthly sales comps for Tampa medical and professional office buildings, market trends, and news. For lease comps, contact me here.
Target growing industries
Tampa boasts a thriving economic landscape with a broad array of industries experiencing exponential growth such as healthcare, technology, and life sciences.
If you’re a landlord or investor of commercial office properties, it’s essential to align your leasing objectives with growing sectors that have established ecosystems in the vicinity of your property.
When seeking tenants for your property, consider targeting tenants in industries that:
- Are growing in your market
- Have established ecosystems in your vicinity
- Are more resistant to economic downturns
*Pro Tip – Reach out to EDC (Economic Development Council) and the Tampa Chamber of Commerce to see if any companies are planning visits to Tampa soon to tour available space.
Location is key, but so is strategy
Everyone has heard the old maxim, location, location, location. The success of commercial property owners often hinges on their property’s location. However, recent population shifts, growth in e-commerce and virtual businesses, and work-from-home trends have changed what is considered a good location.
Tampa Bay boasts thriving business communities, each with its own particular set of nuances. If you are in a location that has become less desirable due to recent changes in the market then you need to come up with a backup plan.
Selecting the right strategy for you and your portfolio will depend on your overall objectives.
Maximize income and occupancy
Don’t let your property sit vacant. Hire a broker that will keep your property consistently leased. The ideal scenario is to foster a long-term relationship with a broker that will get to know you and your property so you don’t have to reacquaint a new broker every time a lease is coming due.
Look for brokers that:
- Have other established long-term leasing relationships in your area and asset class.
- Can demonstrate a successful leasing record.
- Understand your target audience.
- Bring ideas and strategies for leasing to the table.
- Will actively market your property across a variety of channels.
- Have established relationships with target tenants and other tenant representatives.
Leverage specialized local expertise
Local expertise is essential when leasing small-to-mid-sized office space. Work with brokers that have extensive experience in
your market and specialize in your asset class. They’ll be able to provide greater insight into the right kind of tenants for your property, guide you through local market intricacies, and bring in local partners that can facilitate processes before, during, and after a sale or lease transaction.
Be prepared for the unexpected
The commercial real estate market, particularly in Florida, can be unpredictable. Challenges like surging construction and insurance costs, hurricanes, and floods, among other things, might arise.
The ability to adapt and structure deals creatively is essential for landlords and office owners to navigate unexpected challenges that could impact your bottom line, as well as the ability of your tenant to operate and conduct business.
Speak with your broker and attorney to discuss how you can best structure your lease deals to protect yourself if the unexpected happens.
Effective targeted marketing
In today’s competitive market, simply listing a property on an online listing platform isn’t enough…it’s just the start.
Once you’ve invested in an office property, proactively market your available space to attract the right tenants at the highest possible lease rate.
Find a broker that has proven their ability to effectively and widely market their property listings using a variety of channels. A targeted marketing strategy encompassing digital marketing, social media, online ads, and direct mail can effectively engage potential tenants.
Stay informed on the local regulatory landscape
As an office or medical real estate owner in a rapidly changing market like Tampa, understanding the local legal and regulatory environment is essential.
Familiarize yourself with existing zoning regulations, building codes, and other legalities that could impact your investment. At the same time, attend local chamber and city council meetings to stay informed of potential changes that may affect your property’s lease or sale marketability.
Outsource, systematize, & set up processes
One of the biggest advantages of owning a rental property is enjoying the benefits of passive income. The key word is “passive”. While you want to stay in touch with your tenants and engaged with your property, leave the heavy lifting to others where possible.
- Hire a reputable, active, and specialized local broker to show and lease your property.
- Have a go-to maintenance team to handle leaky sinks, malfunctioning washing machines, and toilets.
- Create online payment portals so that tenants can seamlessly pay their rent, and offer the option for automatic payments.
- Set up processes. Having a tenant sign a new lease, moving in a new tenant, and such should all have their own process. This will help a lot in setting expectations with tenants at your property.
Embrace a Partner-Focused Approach
A landlord-tenant relationship is a symbiotic partnership. Their success will contribute to your success, and vice versa. By treating your tenants as partners, you can foster a harmonious relationship that benefits all parties involved. Seek to understand how you can make the tenant experience more beneficial and in line with your tenant’s values. Sometimes, it’s about more than just the lease rate and location.
While Tampa’s office market is indeed rapidly shifting, these 10 strategies will guide office property owners to succeed and maximize returns regardless of the changing landscape.
In conclusion, the booming commercial real estate market in Tampa offers a wealth of opportunities for landlords, office owners, and investors. By understanding the market, making informed decisions, and focusing on your unique goals, you can maximize your outcomes and ensure you’re not leaving any money or opportunity on the table. Let’s redefine success in Tampa’s commercial real estate market together.