August 25, 2025
When the work from home trend exploded at the peak of the pandemic, many speculated commercial real estate might never recover from the crippling blow brought on by empty office spaces and the diminishing vibrancy of downtown hubs.
Flash forward to 2025 and Tampa Bay stands as a sky-scraping outlier with office space demand exceeding supply. And its downtown towers – not sprawling suburban complexes – leading the way.
In August, State Farm applied for a permit with the city of St. Pete to renovate 14,134 square feet of office space inside City Center, an office building at 100 Second Ave. S. The Tampa Bay Business Journal reported that State Farm renewed its lease and added square footage at the office tower.
The decision by the major insurer came just weeks after Dynasty Financial announced it would assume all 45,000 square feet in The Residences at 400 Central, St. Petersburg’s tallest building.
State Farm’s move continues a regional rise that defies national trends. Most companies have downsized, but in St. Petersburg and Tampa, rising rents and dwindling vacancy rates mark the landscape. TBBJ reports that rents have spiked 13.5 percent year over year in St. Pete’s central business district – the largest annual growth in the region.
Meanwhile, Tampa’s office space continues to spark interest thanks to a rise in mixed-use complexes such as Midtown, Water Street, Heights Union/Armature Works and Tampa International’s SkyCenter.
“The office market is not dead by any stretch,” Franklin Street managing director Chris Butler recently told the Tampa Bay Times. “(In many respects) it’s a lot healthier today than it was pre-pandemic.”
Experts attribute the trend to the region and the state’s post-pandemic ability to attract new businesses and residents. Lower taxes and other business-friendly policies spurred relocations, and it continues today with Footlocker and Ark Investments, to name a few.
Fancy amenities also drive the trend and help bring workers back to the office. Companies want complexes with saunas, workout rooms, coffee shops and other treats for employees. Midtown, the complex at Cypress Street and Dale Mabry Highway in Tampa, attributes its mix of office space, restaurants and retail outlets such as Whole Foods for driving its success.
While the positives for the region and St. Petersburg are significant, there could be a problematic issue on the horizon. St. Pete Rising reported last month that office space is dwindling in the Sunshine City.
Altis Cardinal will transform the Ceridian office campus at 3201 34th Street South into Sky Town, a mixed-use community with more than 2,000 apartments and 69,000 square feet of retail. In downtown St. Petersburg, the former Tampa Bay Times headquarters at 490 1st Avenue South faces demolition after a crane fell into the structure during Hurricane Milton.
St. Pete Rising also noted that in the Gateway area, Wood Partners plans to demolish a 165,000-square-foot building at 11101 Roosevelt Boulevard North and build 381 apartment units. In addition, the future of Home Shopping Network’s former home remains uncertain now that HSN has shifted out of Florida.
On the other side of the bay, the former 66-acre Progressive complex sold last year and will likely be converted into warehouse space.If supply continues to go down, meeting the current demand will grow more difficult and the region’s outlier status could diminish.
“If you do not have that new construction inventory or that really highly renovated inventory available, they won’t look at you,” Feldman Equities CEO Mack Feldman told the Times. “You will lose new market tenants, and I know for a fact it’s happened in St. Pete.”