When I moved to Tampa back in the 1980s, everything I needed to buy was located along Dale Mabry Highway -- from Britton Plaza on Euclid Avenue north to the now long-demolished Big Sombrero (Tampa Stadium) near Martin Luther King Jr. Boulevard.
Today Plant City’s County Line Road is our new Dale Mabry.
It seems just about everything consumers are going to buy this decade will be sitting in a series of gigantic logistics warehouses near this roadway that separates Hillsborough and Polk counties.
The growth started with Amazon, which opened its facility in 2015.
Dee Maret, Bridgewater Commercial Real Estate
Six years later, a steady stream of household names has joined them, including Home Depot, ACE Hardware, Nestle Waters, and a soon-to-be recognized name in our market, City Furniture, headquartered in Broward County. Drive east on I-4, take Exit 25, and head south and gawk for yourself. Industrial inventory has increased 20 percent in two years in the submarket alone.
East Hillsborough/Plant City now has more than 18 million square feet of industrial space. By comparison, all of Pasco County, which has seen impressive expansion itself, has 12.8 million square feet. Multiple apartment projects are in the pipeline in Plant City. Hotels are, too. Developers are looking to rezone parcels in the small Southern town to accommodate the inevitable population and job growth.
I’ve always thought of Westshore and Tampa International Airport as more or less the geographic center of the Tampa Bay region. Today our metro’s center point has moved eastward as not only Plant City, 30 miles east of Westshore, is booming, but so are Lakeland and Winter Haven, even farther to the east. Auburndale, which sits on the east side of Polk County, added 500 jobs in September when Amazon opened a new, 1-million-square-foot warehouse there. Polk County is now home to more than 700,000 people and a whopping 72 million square feet of industrial warehouse space.
Newcomers sport unfamiliar out-of-state plates
New Yorkers have been moving here steadily since 1996 when the Yankees relocated their spring training facility to Dale Mabry. However strong job growth, a friendly tax structure, and warm weather are bringing new residents from places we did not see so much until recently. Our region’s population is growing about three times the national average and other Northeastern states like New Jersey, Connecticut, New Hampshire, and Massachusetts are showing up in greater numbers. But take note as well, plates from Colorado, Washington state, and especially California.
Several California companies are eyeing West Central Florida for potential relocations. Florida is competing with Texas, Tennessee, and other Sunbelt states for these companies that have tired of the high cost of living out West. We should win our share of relocations.
Here are some pandemic trends to watch:
Uber Eats, Bite Squad, and Doordash helped eateries survive in 2020. The post-pandemic survivors still must maintain sidewalk seating, be allowed to convert some parking to pick-up locations or find an alternative site with a drive-thru. Ghost kitchens, delivery-only kitchens where food carriers pick up their meals instead of going to the actual restaurant, are beginning to spring up.
Do not write this sector’s obituary just yet. Employers are figuring out they cannot build or even maintain a cohesive company culture by hosting daily Zoom calls. How do they retain top employees or evaluate newer ones? Expect hybrid workers, who will be expected to drive in to work two or three days a week, to become commonplace.
They’ll share a workspace with a second co-worker on the days they work from home. In this hybrid scenario, savvy employers can hire additional staffers without adding square footage -- and potentially improve their bottom lines. I believe the hybrid concept is here to stay, especially for larger organizations, including government entities.
Mark it down: The Bay Area’s best companies will adapt and reopen in earnest -- probably by summer.
At lease renewal time, office tenants will expect larger conference rooms to space out employees and they’ll try to force landlords into more flexible terms. The landlords that offer some outdoor space and daily janitorial, will win the most desirable tenants. Bottom line: A lot of people miss their co-workers and hate being stuck at home. Managers don’t like it either.
Class A grocer-anchored shopping centers will do fine as we look post-pandemic, although their tenant mixes will change. Furniture, hardware, and homeware stores all are thriving. People cannot wait to relax and get back out and eat, shop, go to a yoga class, enjoy a craft beer or see live music with friends. Natural outdoor spaces surrounding places like Armature Works and the St. Pete Pier will win.
However, look for Class B & C shopping centers and vacant big box stores to be converted to last-mile fulfillment centers, medical offices, even workforce housing where the zoning allows. Vacant anchor retail space in aging shopping centers will be cheaper to lease than the industrial sector post-COVID.
IT’S NOT 2008
This recession was not led by bad real estate deals. Investors, who are well-capitalized, want a COVID discount. However, we have not seen any discounting yet. Local banks, so far at least, do not want to appear to be taking advantage of the pandemic. A significant portion of our region is still tourism-dependent. Hopefully, the rest of the world opens up and returns to our beaches in 2022.
New multifamily development will prove more difficult this year because of higher lumber costs, availability of labor, and finding quality and affordable sites.
There are rumblings about built-for-rent single-family neighborhoods in the works in our outlying areas. Builders get efficiencies with operations and maintenance costs. Warehouse and transportation workers in East Hillsborough, Pasco, and Polk counties are earning lower-than-median incomes for the metro and are more likely to rent. Asking rents in these outlying areas are 10 percent or more cheaper.
This Commentary was written for 83 Degrees Media by Dee Maret, a Certified Commercial Investment Member (CCIM) and broker-associate with Tampa Bay Area-based Bridgewater Commercial Real Estate.