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Commercial Real Estate
Business Observer Thursday, May 13, 2021 1 year ago

Workplace Redefined

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Chico's FAS says it is adopting a "hybrid" workplace model post pandemic and will shed headquarters office space in Fort Myers with subleases.
by: Kevin McQuaid Commercial Real Estate Editor

As companies throughout Florida and the U.S. grapple with how or if to bring workers back together again, one major Southwest Florida business has decided to permanently adopt a “hybrid” model for its headquarters employees going forward.

Apparel retailer Chico’s FAS Inc., headquartered in Fort Myers, says many of its employees won’t return to their corporate offices and will instead “work-from-home” on a permanent basis.

As a result, it intends to shed a significant amount of office space on its 11-building, company-owned campus by subleasing it to other firms.

“This is about embracing new ways of working,” says Kimberly Grabel, the company’s senior vice president of marketing.

COURTESY PHOTO -- Kimberly Grabel is senior vice president of marketing at Fort Myers-based Chico's FAS Inc.

“It will be role specific, because with fashion design, it’s important that people work together, but as we settled into the idea of a hybrid working model, we determined that we simply don’t need all the space we have, so consolidating buildings is optimal for us as we move forward.”

Chico’s is offering four buildings on its 11215 Metro Parkway campus for lease, totaling 106,000 square feet — about one-fifth of the 554,731 square feet on the site.

The company has hired LandQwest Commercial Real Estate Services, which maintains offices in Fort Myers, Naples, Tampa and Orlando, to market and lease the available space.

“This is a landmark opportunity in Southwest Florida,” says

stefania pifferi

LandQwest Managing Principal Adam paLMER, along with the firm’s Mike doyle, are marketing the Chico’s Commerce Park space.

“There are not too many properties like this in Southwest Florida,” Palmer adds. “Some of the space comes fully furnished and equipped, and there are a ton of amenities on the campus. It also benefits from being in close proximity to a major airport.”

Last week, Destin-based Acentria Insurance committed to 10,400 square feet in one of Chico’s four buildings through at least 2028. The regional office, which is slated to fully open within weeks, is expected to house about 50 workers.

Chico’s decision to embrace a hybrid office-and-home work model stems largely from internal discussions “accelerated” by the COVID-19 pandemic, Grabel says.

Chico’s is among numerous companies along the Gulf Coast and nationwide rethinking its office footprint in the wake of the pandemic and the advent of successful “work-from-home” policies.

Earlier this month, Tampa staffing company Kforce Inc. indicated it plans to sell its Ybor City campus, which it has occupied since 2001, and look for a smaller headquarters somewhere in Tampa Bay.

The company, which bought the campus 11 years ago for $28.5 million, says it had been utilizing only about 50% of its 130,000-square-foot campus even prior to the onset of the pandemic.

Kforce, which will lease back its former property through the end of 2022 as it searches for new quarters, expects to save roughly $2 million a year through its hybrid work model.

“The pandemic has permanently changed the way we work and has showcased our ability to thrive remotely," Kforce President Joseph Liberatore says of the move, in a statement.

"We believe our future lies in a technology-enabled, fully integrated hybrid work environment."

Conversely, as COVID-19 vaccination rates have risen — roughly 40% of American adults have now received at least one shot of a vaccine — many businesses and even governments are now clamoring to return employees to offices.

There is precedent for Chico’s move to repurpose its space along the Gulf Coast, as well.

Most notably, Pepsico division Tropicana relinquished its headquarters in Bradenton more than a decade ago as part of a corporate consolidation to Chicago. The offices are now the corporate home to retailer Bealls Inc.

In Tampa, financial services giant Capital One Financial’s former campus was purchased by developer Vision Properties in 2016 for $108 million. Today, the seven-building Renaissance Center, on 71-acres, is home to Capital One, WellCare Health Plans, AAA Auto Club Group and Centene Corp.

“This is an opportunity to transition to a conventional business park,” Palmer says. “And Chico’s is committed to long-term tenancy there.”

Chico’s purchased its campus in 2006 for $24 million from a Bonita Springs entity. In 2008, it developed an additional building on the site, which it occupies today.

COURTESY PHOTO -- Chico's FAS Inc. purchased its 11-building campus for $24 million in 2006. It is now offering 106,000 square feet of space to other companies as it adopts a hybrid work model.

Chico's FAS, which was founded in 1983 and now operates 1,302 stores in the U.S. under several brands, is expected to save substantially by subletting its space, though the company declined to provide a monetary figure associated with the move.

“I applaud Chico’s for this move,” says Palmer. “This is a revenue opportunity a lot of companies often overlook. Vacant space is costly and there’s no reason a responsible company wouldn’t try to tap into that revenue stream.

“I’ve known companies that have space sit vacant, without activity, for a decade or more.”

LandQwest has priced Chico’s space at between $12 and $16 per square foot, on a full-service basis.

In addition to a guarded security gate, Chico’s campus contains amenities such as on-site child care, a health care facility, food and beverage choices, a fitness center and common-use bicycles and golf carts.

Palmer says that integrating new tenants like shouldn’t be difficult, even though Chico’s will continue to occupy a majority of the campus’ space.

Acentria Insurance, for instance, will share its new space with Chico’s, which operates a “command center” and a mock store for training purposes in the soon-to-be multitenant building.

“Issues like security and fire separation will be easily accommodated,” Palmer says. “Much of that has already been addressed, and the activity has been very positive so far.”

Grabel says Chico’s has no plans to make additional space on the campus available beyond the four buildings already being offered.

“We’ve learned from the pandemic that the hybrid model works for the company, and so we’re going to continue with that,” Grabel says. “We have a beautiful campus here and now we’ll be able to share it with others.”

 

 

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