Downtown tower sidelined because of weak market
Developer Trammell Crow has sidelined its plan to build downtown Tampa's first new office tower in two decades until the office market picks up.
Bob Abberger, Trammell Crow's senior managing director in Florida, said he isn't giving up on his SouthGate project, which would include a 20-story office building and a separate 350-room hotel. But he won't proceed until he's convinced demand for office space has grown.
He still hopes to break ground by the end of this year, but made no promises Monday.
“I don't want to build a building that just cannibalizes other office buildings,” he said.
Abberger is a downtown Tampa booster who insists there's room for another luxury office building. Despite a weak market, he announced an ambitious plan in summer 2011 to build the first such building since 1992 across Florida Avenue from the Center for Advanced Medical Learning and Simulation.
His proposed tower would be more akin to the West Shore Business District's short, squat office buildings than downtown's tall and lanky ones. For example, Trammell Crow's SouthGate tower would rise just 20 stories, but it would offer 25,000 square feet of office space on each floor to appeal to big tenants.
Downtown's tallest office buildings are upward of 40 stories and generally offer 20,000 square feet or less on each floor. Overall, SouthGate would offer 400,000 square feet of space.
Trammell Crow would build a 350-room luxury hotel and a parking garage adjacent to the office tower on the same block.
Unfortunately, the economy hasn't cooperated and Abberger had to pull back on the project a few months ago. Instead of starting on it last fall, he's now hoping to get started by the end of this year. Trammell Crow still has a contract to purchase the downtown land from the Collier family, a prominent landholding family for whom Collier County is named, he said.
Downtown's vacancy rates exceeded 20 percent during the worst of the recession, and although they've improved since then, companies still aren't hiring enough people to fill space.
“I have multiple new hires in this year's budget. I haven't pulled the trigger on them,” Abberger said.
That Trammell Crow is pulling back may not be a surprise to real estate professionals.
Downtown's vacancy rate currently is about 14 percent, which is a big improvement from the 20 percent vacancy rate of 2009, said Scott Garlick, a tenant adviser at the Cushman & Wakefield real estate firm, but there still isn't enough demand to support a new high-rise tower.
“I don't know how many tenants downtown are necessarily willing to pay more to go to a new building,” Garlick said.