The Truist bank merger leaves a gaping hole in downtown Tampa's office market
Published: Dec 21, 2020

Truist Financial is consolidating its office space in downtown Tampa, leaving a major vacancy in the city's oldest office tower.

Truist, the new name of the merged BB&T Corp. and SunTrust Banks Inc., has vacated more than 51,500 square feet in Park Tower as well as a street-level retail space where BB&T operated a bank branch (BB&T also had signage on the tower.)

The merged bank will essentially cut its footprint in downtown Tampa in half, with plans to operate from SunTrust Financial Centre, where it occupies 55,810 square feet between a long-term lease and a sublease, according to data from CoStar Group Inc.

Truist will retain the naming rights to what's currently the SunTrust Financial Centre at 401 E. Jackson St., said Jim Daly, the bank's West Florida division president. With an illuminated ziggurat that changes color for holidays, sporting events and other occasions, the tower is among Tampa Bay's most recognizable buildings.

Daly told the Business Journal that the bank will continue to be a "stalwart presence in the central business district." A representative from Highwoods Properties, the North Carolina-based real estate investment trust that owns the SunTrust tower, declined comment.

“When we announced the merger, almost immediately, we looked throughout the company and there were clear places where we overlapped from a space perspective," Daly said. "Our real estate and space planners have done an extraordinary job, and we chose to move teams into SunTrust Financial Centre."

Even before the novel coronavirus pandemic, office tenants seeking more than 50,000 square feet were not common in the Tampa Bay region, where the majority of office leases are between 10,000 and 20,000 square feet. The majority of office-based work shifted to remote in March, and there's no sign workers will return to office buildings before the Covid-19 vaccine is widely available in summer or fall 2021. That uncertainty has most executives pressing pause on real estate searches while they re-evaluate their space needs for a post-Covid world.

The 471,000-square-foot Park Tower at 400 N. Tampa St. was 94 percent occupied when its owners, a partnership of City Office REIT, Feldman Equities and Tower Realty Partners, unveiled a multimillion-dollar renovation in 2019.

“Truist’s space at Park Tower is very desirable and has over five years left on its term," Mack Feldman, vice president of asset management for Feldman Equities, said in a statement. "Together with a rare top of the building signage opportunity in the core of downtown Tampa, we expect Truist will be able to find a great subtenant for the building.”

The Park Tower vacancy comes as coworking giant WeWork confirmed to the Business Journal that it would not move forward with plans for a 50,000-square-foot location in Heights Union, a brand-new office building in the Armature Works-anchored Heights district. That leaves another large vacancy in the downtown office market — where Water Street Tampa is also set to deliver a 380,000-square-foot office tower this year.

Prior to the pandemic, Tampa Bay's office market was as hot as it had been in years. There were few big blocks of contiguous space available, especially in coveted areas like downtown and the Westshore business district. With nearly 750,000 square feet of office space to be delivered between Water Street, the Heights and Midtown Tampa, there was a general sense of excitement in the commercial real estate community, as Tampa hadn't delivered multitenant speculative office space in the downtown area in a quarter century.

Now, there's a looming cloud of uncertainty over the market as executives like Daly drill down into how much space they truly need in a post-Covid world. He sees a few days of remote work each week as a quality of life bonus, especially for employees who live in far-flung suburbs.

"Pre-pandemic, as we were bringing two companies together, we were already looking at reduced office space because of redundancies, and we knew a certain amount of work could be accomplished remotely," Daly said. "If you’ve got people commuting from Riverview or Wesley Chapel to downtown, that's not the most fun commute."