Downtown Tampa, anchored by its office market, loses a big tenant to Midtown Tampa with TECO move
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Dec 19, 2022

When Tampa Electric Co. and Peoples Gas move to Midtown Tampa in 2025, the central business district will lose a major office tenant that’s been a downtown mainstay for more than 40 years.

More than 900 employees will relocate from downtown Tampa to Midtown, where the utilities will own 11 stories in Midtown East, an office to be developed by New York-based Bromley Cos. and Highwoods Properties.

While multifamily developers have flocked to downtown Tampa in recent years, the office market remains the anchor of the urban core. Even as the Covid-19 pandemic shifted office-based employees to remote and hybrid work models, office workers are the most reliable stream of foot traffic for downtown restaurants and retailers.

Just over 13% of the nearly 9 million square feet of office space was vacant at the end of the third quarter, according to CBRE Group Inc.’s data. (TECO Plaza is 285,621 square feet; the companies will occupy 292,180 square feet in Midtown.) The Tampa Downtown Partnership says there are about 70,000 downtown office workers, though that number ebbs and flows based on remote work schedules — meaning TECO and Peoples Gas account for more than 1.25% of all downtown office workers.

But TECO’s move comes on the heels of several big wins for downtown Tampa, including the ConnectWise headquarters relocation and Pfizer Inc.’s operations center, which opened in 2021. Because of that, observers and real estate professionals say TECO’s move isn’t the crushing blow it once might have been for downtown Tampa.

“There’s a bit of sadness but also recognition that we are growing probably bigger and in more places than we ever imagined,” said former Tampa Mayor Bob Buckhorn, “and so to see Midtown get a tenant like TECO — and all that exposure will bring to Midtown — just tells you this rising tide is floating a lot of boats.”

Buckhorn, who left office in 2019, focused on revitalizing downtown by recruiting residential developers to the city center. That’s helped lessen the blow of both remote work and TECO’s move, he said.

“If this had happened a decade ago, it would be a big deal,” Buckhorn said. “Today, that’s to a much lesser degree, and that’s really a sign of our success and how far we’ve come as a community.”

Ryan Reynolds, a senior vice president with CBRE, agrees. Reynolds was involved in ConnectWise’s new downtown headquarters and the Pfizer operations center. While the TECO move will affect market statistics and the vacancy rate, Reynolds sees it as a different deal than if TECO were leaving a multitenant office tower.

“This building has never been on the radar of third-party users,” he said. “It is owned by a developer, but it’s been fully leased for so long that it has never really been in the conversation in terms of users looking at downtown.”

Typically, Reynolds said, a company that’s considering office space in Midtown or Westshore wouldn’t also be looking at downtown. But that’s changing, he said, particularly with the development of mixed-use districts like Water Street and The Heights.

“We’re starting to see companies look at Tampa’s mixed-use projects as a class of their own,” he said. “It’s somewhat agnostic to geography but more interested in the surrounding amenities.”

When TECO does vacate its downtown headquarters, Reynolds said he sees the building as a potential candidate for adaptive reuse. Post-pandemic, aging office buildings in other cities across the U.S. have been repurposed as hotels and multifamily towers.

“It could be a great opportunity for somebody to come in and look at it through a different lens,” he said.