Downtown St. Pete office space is finally growing. Co-working and mixed-use buildings are coming online and larger projects are planned on city-controlled lots stretching west.
Demand is strong due to the economy and downtown’s renowned walkability. The city is creatively negotiating with developers to increase office space, which has been flat since the Great Recession. More office space could help complete Mayor Rick Kriseman’s live-work-play vision, increase high paying jobs, diversify the economy and attract growing companies and all they bring to the community.
Taking Inventory
The existing office towers are thriving, at least 90% occupied with $30 per square foot rental rates. They have been extensively renovated to appeal to millennial workers, technology firms, coworking providers and relocations. Companies including Dynasty Financial and L3 Technologies have recently chosen to move their headquarters to downtown. Technology companies now occupy 15% of downtown office space. St. Pete’s Grow Smarter Strategy targets growth in industries including financial services and data analytics.
But the near-term demand for new office space will be met by venues other than traditional office towers near the water. The seemingly unlimited market for residential towers with dramatic views, and lately for mid-sized hotels as well, has driven up land prices. Labor and material costs have also increased. Mack Feldman, VP of Feldman Equities which owns three of the office towers, estimates rates of at least $45 psf would be required to justify a large new speculative office building in the downtown core. Bank financing for such buildings requires pre-leasing commitments and tenants in St. Pete are relatively small and not likely to commit years in advance of occupancy.
Coming Soon
Several co-working locations have launched downtown recently. Marketing technology start-up iSOCRATES moved from Connecticut to the Rising Tide co-working offices in an adapted older building on Central Avenue’s 400 Block and expects to grow to 50 employees in the near future.
A 28,000 square foot building on 4th St. North across from Williams Park is being renovated to open late this year as a WorkLodge co-working venue. Franchisee Dan McLean expects it to house 90 businesses with almost 300 employees plus 100 members using a 3,000 sf open workspace. There will be a training area, conference rooms and an event space. WorkLodge has found companies appreciate the convenience of scalable furnished spaces and shortterm leases while workers benefit from networking interaction with others in a variety of industries.
Nearby, Wannemacher Jensen Architects (WJA) has broken ground on a 38,000 sf mixed use building including office, condos and retail on Mirror Lake. WJA principal Jason Jensen supports dense development of mixed-use buildings to efficiently and sustainably enhance city life. With ride-share, walking and biking to work he expects the city’s parking capacity requirements to be reduced.
The highly anticipated Red Apple Group development at the two-acre Central Ave. 400 Block site is expected to feature a condominium tower but the city expects the project will also include at least 25,000 sf of office space.
City Development Administrator Alan DeLisle estimates public-private partnerships will add more than 400,000 sf of office space in the next few years. Three sites described below could comprise over 75% of this total.
A 25-story mixed-use tower including at least 40,000 sf of office space has been approved at the corner of 1st Ave. N and 5th St. The DeNunzio Group agreed to purchase the .65 acre Christ United Church parking lot for $5.3 million. The city partnered in the project by agreeing to purchase approximately $9 million in parking garage space in the building.
Moving west to more open territory, UPC Insurance plans to build a 150,000 sf headquarters at 800 1st Ave. S. The city owns that 4.6 acre lot and approved UPC’s $5 million offer over a higher bid by an apartment developer in order to ensure office growth. UPC proposes to add 300 jobs at the site as well as to add a hotel, retail space and large parking garage.
Looking to The Edge District
St. Pete is also requiring new office space to be a major component of proposals for the 2-acre old police headquarters lot at Central Ave. and 13th St. in the booming Edge District. The city has received several mixed-use proposals which include up to 150,000 sf of office space. Of course the nearby Tropicana Field site has immense potential for offices and everything else if the economy cooperates once the Rays’ fate is decided. The stars may be aligned uniquely for the citycontrolled property bordered by the Pinellas Trail with Booker Creek running through it. The city has developed master plans for the site both with and without a baseball stadium.
The site’s 86-acre area is 70% larger than the Water Street Tampa mixed-use project which is expected to include two million square feet of office space – roughly the total current office space in downtown St. Pete. But architect Jensen recommends that an “arms race” with Tampa be avoided, “The city has been talking about sequential development with the texture of a typical city and cohesive with surrounding communities.”
The Big Picture
As office space expands one can envision a balanced live-work-play downtown stretching from the Pier to Tropicana Field and beyond with increased work opportunities for residents throughout the area.
