Where Am I Supposed to Work in Downtown St. Pete?
By George Meyer
While local developers congratulate themselves about the explosion of new residents morphing downtown St. Petersburg into a millennial/hipster haven, they may overlook an intriguing question:
Where do all those hipsters want to work?
The short answer is: they want to work in that same downtown.
For a longer answer, take an expedition into the jungle of research about Millennials (if you want it closer-up, gird your loins for a Google search of Millennial Market Preferences).
You’ve probably read a lot about preferences of 24-34-year-old workers, a.k.a. the workers of the future, yes, That would be millennials, or the 80-million or so folks born between 1980 and 1994.
Millennials’ preferences, like them or not, influence markets, cityscapes and socio-economic groupings all over, first in so-called “knowledge capitals,” then in “American middleweights,” of which Tampa Bay is a part. St. Petersburg forms an important subgroup of this middleweight area: while Jeff Vinik’s ambitions and Bill Gates’ money drive changes in downtown Tampa, individual investors push St. Pete’s downtown. Put another way, there’s more room for independents and sub-billionaires to profit in St. Pete.
St. Pete’s upward growth clings more closely to millennial values than Vinikesque trickle down development. The signs?
The most measurable Gen Y preferences in the group-approved Live-Work-Play ethos come from the Live category. Putting off maturity as long as they can, Gen Y’ers are choosing smaller living space, renting over buying, and picking urban spaces over the ‘burbs.
Naturally, builders react: nearly 1,700 new apartments or condominiums are under construction in South Pinellas alone, and city officials say about 1,000 or so are planned.
“The takeaway is that the submarket added almost 2,000 units since 2014 and yet the vacancy rate came down from over 7 percent to just over 4 percent today,” according to Linwood Gilbert of Urban Realty Solutions in Tampa. “Huge demand. HUGE!”
That low vacancy rate has also caused average monthly rents to push well into four figures.
Also popping up are new bars, restaurants, galleries, breweries and even distilleries to provide the “Play” facilities for the Live Work Play formula.
The whole idea of Live-Work-Play, in fact, is premised on the notion that integrating those life activities makes them more harmonious and productive.
Meanwhile, Peter Fischbach asks, “will downtown become a good-to-live/play environment characterized by an outward commute Monday through Friday?”
There are growing live and play spaces. There are no new work spaces. How come?
Basic Urban Arithmetic
“Demand for office space,” said Fischbach, “while steady, is not overwhelming. I think that rental rates for Class A properties in downtown St. Pete need to be north of $30 per foot, maybe even $35 per foot to interest office developers. Right now rates are drifting in the mid to high $20 range.”
City officials see no new office development currently in the works, which underlines the simple but stern arithmetic.
Friends at the building department in St. Pete say that three are no plans that they know of for construction of new office space.
That bottom line everyone touts doesn’t just mean the smart money follows the leaders. It means that keeping abreast of marketplace changes can pay off for decision-makers. And in this case, if tomorrow’s workers demand Live-Play-Work in downtown space , which already has residences (Live) and restaurants/museums/watering holes (Play), then it only makes sense to offer them creative and production space (Work), too. But when?
George Meyer is a published author, former journalism professor and residential real estate developer in Tampa.