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Business Observer Friday, Sep. 14, 2018 5 days ago

Water Street Tampa poised for a trio of new office offerings

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Strategic Property Partners preparing to develop two new office towers totaling 900,000 square feet in downtown Tampa.
by: Kevin McQuaid Commercial Real Estate Editor

The 52-acre Water Street Tampa development downtown has to date been centered around new hospitality, institutional, residential and retail uses.

But that focus is slated to change somewhat next spring, when master developer Strategic Property Partners LLC (SPP) embarks on the first of three planned office buildings that will add 1.06 million square feet to Tampa’s downtown in the first phase of the $3 billion project.

In addition to Sparkman’s Wharf, a mixed-use project that will contain 180,000 square feet of new office space when delivered in mid-2020, SPP has unveiled plans for a pair of new towers rising 20 stories and 19 stories, respectively.

At 1001 Water St., designer Cookfox Architects’ plans call for a roughly 380,000-square-foot building. SPP will develop the 20-story structure adjacent to the new $130 million University of South Florida Morsani College of Medicine, which is now under construction.

David Bevirt, SPP’s executive vice president of corporate leasing and strategy, says the company plans to develop 1001 Water St. on a speculative basis, with construction commencing sometime in the second quarter of next year.

If that timeline holds, 1001 Water St. would be the first new, ground-up office building constructed in downtown Tampa in a quarter century.

“It's important to us that we offer a real mix of product types,” Bevirt says. “And we think that with these three, distinct projects, we can really cover a broad swath for tenants seeking space.”

He adds the 1001 Water St. building is scheduled for delivery in mid-2021. Asking rental rates will be around $55 per square foot, on a gross basis, meaning SPP will cover tenant expenses such as utilities, security and taxes.

“Local businesses might consider those rates to be somewhat high, but national and regional tenants won’t, and we think folks will share our view especially when they see what level of building we’re providing,” Bevirt says.

He notes, too, that the new offices from SPP, a joint venture between Microsoft co-founder Bill Gates’ Cascade Investment LLC and Tampa Bay Lightning owner Jeff Vinik, will help companies recruit and retain workers thanks to a raft of amenities such as a test kitchen on site and a focus on wellness.

Bevirt and other SPP officials are planning this fall to visit cities such as Nashville; Austin; Denver; Raleigh, N.C.; and Miami, cities from which they expect to draw tenants.

At 400 Channelside Drive, SPP intends to develop 500,000 square feet of office space, rising 19 floors. Design firm Gensler envisions a 30,000-square-foot “sky garden” connecting tenants to the outdoors.

There, Bevirt says development won’t begin until roughly 60% or 65% of the office space in 1001 Water St. is committed.

Unlike Sparkman Wharf, the site of a former Imax theater with 60-foot-clear ceilings that is being envisioned as space for the "creative class," and 1001 Water St., the 19-story 400 Channelside space — with floor plates as large as 34,000 square feet — will be marketed to more corporate users.

“We’re being very thoughtful and methodical, because we want to meet the demand from the market,” he says.

In all, SPP has had conversations for roughly 500,000 square feet of the space to date, Bevirt says.

As the Business Observer first reported nearly a year ago, SPP has tapped commercial real estate brokerage JLL to lease the pair of towers.

“We considered a number of really outstanding firms, but ultimately felt that JLL was a brokerage with outstanding global reach and strong research and marketing capabilities,” Bevirt says.

Parking for the pair of high-rise offices will be accommodated by a pair of new parking garages being developed within Water Street Tampa. Together, the new garages are expected to contain more than 2,500 parking spaces for tenants, residents and visitors.

Bevirt notes SPP also is contemplating various other parking and transportation options, including Uber credits provided to tenants or off-site shuttles.

Meanwhile, at Sparkman Wharf, a new two-story lobby is being installed in the 615 Channelside Drive project. The office space, with ceiling heights up to 40 feet, is being marketed to “creative and innovation-oriented tenants,” SPP says.

Bevirt says SPP also intends to relocate its offices in the building to 25,000 square feet in early 2020. Its offices will also contain a projectwide marketing center, he says.

The project also includes some 65,000 square feet of retail and restaurant space, along with an open-air space for gathering.

Commercial real estate firm Franklin Street’s Tampa office is handling the office leasing efforts there.

Bevirt says SPP isn’t at all concerned with heightened competition from the 53-story Riverwalk Place, also scheduled to break ground in downtown Tampa next year, or a handful of new projects that have been announced for the Westshore business district near Tampa International Airport.

In all, those projects also would add more than 1.2 million square feet of office space.

“Our space will be completely different,” says Bevirt. “It’ll be a much higher quality of building than this market has ever seen.”

Even with the bevy of planned office space, SPP also intends to develop a separate 750,000-square-foot office tower within Water Street Tampa to attract a regional or national headquarters by 2026.

To date, SPP has announced plans for a pair of new Marriott-flagged hotels, hundreds of residences, roughly a dozen restaurants at Sparkman Wharf and medical and teaching space within the USF Morsani project.

In all, Water Street Tampa is being envisioned to contain roughly 9.5 million square feet of commercial and residential space downtown, in an area anchored by Amalie Arena, the Tampa Convention Center, the Tampa Bay History Center and other civic amenities.

"We're going to be offering an experience corporate America is looking for," Bevirt says. "We have the tools that will allow corporations to recruit and retain employees effectively."

 

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