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Business Observer Friday, Jan. 29, 2016 2 years ago

Centauri move highlights space shortage

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While Centauri Specialty Insurance Holdings Inc.'s plan to develop a new three-story headquarters in Lakewood Ranch later this year highlights the company's rapid growth, it also underscores the dearth of Class A office space throughout the Gulf Coast.
by: Kevin McQuaid Commercial Real Estate Editor

Centauri move highlights space shortage
While Centauri Specialty Insurance Holdings Inc.'s plan to develop a new three-story headquarters in Lakewood Ranch later this year highlights the company's rapid growth, it also underscores the dearth of Class A office space throughout the Gulf Coast.

In searching for a site, Centauri scoped out dozens of potential properties in Pinellas, Manatee and Sarasota counties before contracting to acquire an undeveloped five-acre tract from Lakewood Ranch master developer Schroeder-Manatee Ranch Inc. at Lakewood Ranch Boulevard and Communications Parkway.

Few of the sites or buildings it considered, however, could accommodate Centauri's expected growth and provide economical expansion space.

“They wanted their space to be a reflection of their business, but the designs and efficiency they were seeking just didn't exist,” says Cheri O'Neil, the Savills Studley senior vice president and Tampa branch manager who represented the company in its negotiations.

Studley statistics indicate Class A vacancy rates have dipped in Sarasota and Manatee counties to a six-year low of around 8%, and brokerage firm CBRE expects Southwest Florida rents will rise 35% through 2021 as a result of shrinking inventory. Occupancy rates in Hillsborough and Pinellas counties are experiencing the same compression, leading developers like Feldman Equities to promote new construction.

Centauri, which expects to generate $135 million in revenue this year, plans to finalize its land purchase in June and complete its 30,000-square-foot building before the end of 2017, company officials say.

Centauri plans to initially occupy 15,000 square feet of its new $8 million headquarters building, a jump from the 6,000 square feet it now occupies on separate floors in the Energy Court Building at 5391 Lakewood Ranch Blvd.

Much of the added space stems from employee growth. In 2011, for instance, the property and casualty insurance company had just three employees and operated in three states.
Today, the company has 25 employees in Energy Court and 36 in all, and operates in nine states. Several regularly have to work from home because Centauri has outgrown its quarters, and the company has instituted a hiring freeze because it has run out of space.

Centauri CEO Ricardo Espino says the company could add another 20 workers in the next three years.

The insurer's new digs will also have a larger kitchen for employees, more bathrooms and additional room for storage, as well as more work stations.

“It just ultimately made so much sense for us, for our existing employees and the ability to attract future talent,” Espino says.

Espino notes, too, that the larger quarters will ultimately save Centauri money. Building in Lakewood Ranch, he said, will cost roughly the same as much as leasing space for 10 years in downtown Sarasota — not that a 30,000-square-foot block of contiguous Class A space exists there, either.

To design, build and oversee its new building, Centauri has retained Fawley Bryant Architects, Tandem Construction and Element Commercial Construction LLC.

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