The Sun Belt is an increasingly popular destination for tech companies and the people they employ, and Florida is no exception. Two of the state’s metro areas are among the nation’s 10 most popular destinations for moving Americans. Additionally, Florida has the highest percentage of entrepreneurs in the U.S., according to the Kaufmann Foundation.
However, this growth is not exclusive to the state’s largest urban centers. Many Florida cities with less than 300,000 residents are also attracting investors, entrepreneurs and workers, creating demand for office space. So, after checking which California cities with populations under 300,000 added the most office inventory, we are now shifting our focus on the Sunshine State with the same question in mind.
For this analysis, we used Yardi Matrix data to examine office space added between 2009 and 2019 to Florida cities with populations of less than 300,000 residents. We then highlighted the 10 cities that added the most square footage of office space. Only office spaces larger than 25,000 square feet were considered.
We also looked at other characteristics of the new properties, such as class and type of office space, ownership status, and the amount of office space scheduled to be delivered in 2020. Read on to find out more.
10 Cities Add 9.5 Million Square Feet of Office Space to Florida Inventory
Between 2009 and 2019, the 10 cities on our list delivered more than 9.5 million square feet of office space in 94 new properties. Just under 3 million square feet came from 59 properties smaller than 100,000 square feet, while the remaining 6.5 million square feet was spread out between 35 properties larger than 100,000 square feet. The mix of large and small properties shows that the Florida office market can accommodate company rosters of almost any size.
Of these properties, 22 are owner-occupied. The remaining 72 are under lease; in particular, 55 have multiple tenants and 17 are occupied by a single tenant.
Orlando added the most inventory of the cities on our list. Almost 3 million square feet of office space was built here between 2009 and 2019, which is more than the next three cities combined. Fort Myers saw an increase of 1.2 million square feet, while the office inventory in St. Petersburg grew by 850,000 square feet.
The upward trend of the office market in these 10 cities is poised to continue: 11 properties totaling 1.7 million square feet of office space are scheduled to be delivered in 2020.
General & Medical Offices Lead Florida Developments, Flexible & Shared Spaces on the Rise
Healthcare jobs are increasingly desirable in the U.S., and the ripples made by the booming healthcare industry are also being felt in Florida. Specifically, of the 94 properties built in the past 10 years, 37 are medical offices or contain medical office space. Three properties built in this timeframe also house research and development (R&D) facilities.
Non-traditional and coworking office spaces are also growing in popularity. In particular, seven properties contain shared office space, three are exclusively made up of flexible office space, and another three include creative offices. The variety in the types of available office space indicates that flexibility is a primary characteristic of the office submarkets in Florida.
Orlando Office Inventory Exceeds 30 Million Square Feet
As the largest city on our list, Orlando features a vibrant office market that shows no signs of slowing down. In 2009, the city had a total of around 29 million square feet of office space; in 2015, this rose to 31.9 million – an increase of more than 10%.
The 3 million square feet of office space that was added in the last 10 years is distributed over 30 properties; 19 properties under 100,000 square feet accounted for around 1 million square feet of office space, while 11 office buildings larger than 100,000 square feet contributed the remaining 1.9 million.
Two of the properties are owner-occupied, while seven have been leased to single tenants; 21 have multiple tenants. A total of 2.6 million square feet of newly built office space in 21 properties is Class A, and an additional 371,000 square feet represents Class B space.
However, Orlando’s growth wasn’t limited to the office sector. The city’s population grew by 21.1% between 2009 and 2018, bringing it to 285,000 residents, 160,000 of whom are in the workforce. The median income has also grown by 30%, reaching $51,820 in 2018.
During the last 10 years in the cities we studied, the Darden Headquarters—completed in 2009—was the largest property completed. The restaurant operator is the only Fortune 500 company headquartered in Orlando, and its corporate offices at 3801 West Taft Vineland Road contributed 525,000 square feet of Class A office space to the market. Orlando’s next-largest completions were the Maitland Summit Park III Building and the Orlando Health Heart Institute.
Moreover, six properties are scheduled to be delivered in 2020, totaling an additional 1.2 million square feet of office space. The 780,000-square-foot KPMG Lakehouse, which will open at the end of January, is set to dethrone Darden as the largest office building built in Orlando since 2009.
Office Space in Fort Myers Grows By 23% in 10 Years
The Fort Myers office market added 16 new properties, increasing its inventory by 1.2 million square feet. The new office space was almost equally distributed between large and small properties: 550,000 square feet of office space came from properties smaller than 100,000 square feet, while the remaining 650,000 square feet came from those above this threshold.
Of the 16 properties, five are Class A, and the rest are Class B. Also worth noting is that half of the properties contain medical offices in their facilities.
The largest addition to the Fort Myers office market was the Skyplex building on the Gartner Campus. The property was completed in November 2018 and expanded Gartner’s presence in the city by 250,000 square feet of Class A office space. Other major deliveries include the Eastlinks Business Park I and II, also occupied by Gartner, and Chico’s National Store Support Center.
At the same time, Fort Myers’ population increased by 27% in the past 10 years, exceeding 82,000 residents. Its housing market grew from 36,000 units in 2009 to 42,400 in 2018, with more affordable housing units currently in development.
Four Properties Responsible For 95% of New Office Space in St. Petersburg
Five properties were delivered in St. Petersburg between 2009 and 2019. Of the total 850,000 square feet of office space, 810,000 came from four owner-occupied properties: the development at 1 ASI Way North; two new facilities belonging to the John Hopkins All Children’s Hospital; and the Suncoast Medical Clinic.
The multi-tenant property at 136 4th Street North in the city’s central business district is the only property less than 100,000 square feet to be completed in the past 10 years here. It’s also the only one to be designated as Class B space; the other properties are Class A.
Medical offices, in particular, have witnessed significant growth in the city, with three of the five developments belonging to medical institutions.
Meanwhile, the residents of St. Petersburg have seen steady growth in salaries; average income here increased by a considerable 40%, reaching $58,000. Housing activity, on the other hand, has been slow—less than 2,000 units were built in the last 10 years.
Finally, the office building at 2500 34th Street North is scheduled to open in Q1 2020, contributing another 40,000 square feet of space to the St. Petersburg office submarket.
600,000 Square Feet of Office Space Hit Tallahassee Market, All Class A
Office space in Tallahassee increased by 600,000 square feet in 11 new properties, marking a 9% increase in inventory. Notably, all of the office space added in the last 10 years in the state capital is Class A, which underscores the demand for high-grade properties in the city.
Five properties have several tenants, while three are leased to a single tenant and three more are owner-occupied. Tallahassee only has 85,000 square feet of owner-occupied property.
Of the new properties, all but one are smaller than 100,000 square feet. These smaller projects amount to more than 400,000 square feet. The largest development in the city—and the only one to break the 100,000 square foot mark— is the 197,000-square-foot 2181 East Orange Avenue, a medical office leased to the Department of Veterans Affairs. One other new property in Tallahassee is classified as a medical office, and two government office buildings were also built.
Tallahassee also has a project lined up for delivery in 2020—the 37,108-square-foot medical office at 2605 Welaunee Blvd.
The city fares well when it comes to median income, which surpassed $42,000 in 2018—a 22% increase from 2009. Its population also increased by 12%—to 193,550 as of 2018—according to U.S. Census Bureau data.
Methodology
We looked at all office properties greater than 25,000 square feet in Florida cities with populations of less than 300,000 residents.
Data on office square footage for each city is based on properties built or shown as completed between January 1, 2009, and December 5, 2019.
Data on office space currently in development is based on properties currently under construction, with estimated delivery dates between December 31, 2019, and June 30, 2020.
We only included the total amount of office square feet incorporated in these properties, excluding square footage with other uses (such as retail, hotel, etc.).
Data for population, income, employment and housing was obtained from the U.S. Census Bureau reports for 2009 and 2018.
Data extraction date: December 5, 2019.
Data sources: Yardi Matrix and the U.S. Census Bureau
