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oundtable:
Commercial Real Estate Commercial real estate in Tampa Bay is expected to remain strong over the long term, despite a near-term cooling as a result of the COVID-19 impact. From online retailers to consolidation, market leaders discuss the trends that are underpinning the industry.
Scott Dobbins
Founder & Principal Hybridge Commercial Real Estate
How has the growth of online retail changed the retail tenant market? It has affected our business development pursuits with regard to our retail tenant representation business. There has been a new focus on identifying and working with “non-disruptable” service and food-based retailers and digitally native brands (DNBs). DNBs are retail brands that were originally formed as online retailers. Once they reach a level of success online, many of these brands are raising significant capital in an attempt to go omnichannel. This has resulted in a recent migration of digitally native brands that started online and are now expanding to brick and mortar locations. How has the strength of the retail commercial real estate market in Tampa trended in the past year? The retail market continues to be very strong here. Demand continues to exceed supply in many of the strongest retail markets throughout Tampa Bay. This continues to drive up rental rates and has limited cap rate decompression for stabilized retail assets. What is a unique trend that has emerged in the market? One trend we are starting to see is the emergence of what is referred to as ghost restaurants. These are restaurants that choose to occupy commissary or commercial-grade kitchens, and are set up to market and deliver their food exclusively via app-driven delivery services such as Uber Eats, Postmates and Door Dash. The economic incentives to this model are compelling as the occupancy and labor costs are significantly less than a typical restaurant which should drive higher profit margins. 66 | Invest: Tampa Bay 2020 | REAL ESTATE
Jonathan Levy
Co-Founder & Managing Partner Redstone Investments
Where do you see the most potential in real estate development? There are many pockets of opportunity. Westshore, Downtown, West Tampa and Seminole Heights all have their own success stories. The transition is happening all around the market. On the peripheries, the north part of Hillsborough County and the south part of Pasco County are both exploding with activity. Wesley Chapel is also booming and as a result prices in all those markets are increasing. Downtown and the Westshore Mall have been talked about a lot and is now starting to come to life. A portion of the Westshore Mall is being redeveloped for mixed-use and the Austin Center was just rebranded as Westshore Metro Center. Midtown Tampa is well underway and Armature Works in the Heights District is a huge success. From Kennedy to Columbus, there are lots of opportunities and neighborhoods starting to transition into areas of growth. I think more will start to happen in areas surrounding these projects. What will keep the growth of the real estate market sustainable? I think the weather conditions in Tampa do much of the work. It’s not necessarily what attracts people to the area but it’s certainly one of the things making people stay. Also, the office rents and taxes are substantially less than other big cities. It’s a major selling point for the Tampa Bay market. We develop and keep our products, holding our properties for the long term. We don’t try to make record-breaking deals, but rather we recognize when a property is a solid investment.
