Three Reasons Why Firms are Relocating to Tampa
May 5, 2016
Chase Patillo, guest blogger | Forward Florida
In August 2015, Gov. Rick Scott announced that corporate giant Johnson & Johnson will open its North American shared services headquarters in Tampa, bringing 500 new jobs and investing $23.5 million in the community by 2018. If you’ve been following the city’s economic emergence over the past decade, this news did not come as a surprise. As the 18th-largest metro area in the nation, the fast-growing Tampa Bay MSA is a top candidate for companies considering expansion and relocation.
Since 2010, roughly 350 companies have invested in our community, creating over 29,000 new jobs and more than $1.8 billion in capital investment, according to the Tampa Hillsborough EDC. Companies with a major local presence include Citi, Amazon, USAA, DTCC, JPMorgan Chase, Bristol-Myers Squibb, MetLife, Coca-Cola, New York Life, Progressive, Raymond James, WellCare and Franklin Templeton. Last year alone, CBRE’s office brokerage team represented a few of the aforementioned companies, as well as a number of others, in major relocations, new leases or renewal transactions throughout Greater Tampa Bay.
Although there are many reasons why a firm would pursue a regional or national headquarters relocation, the one overlapping factor is that the new home must allow the company to meet its strategic objectives. More companies are discovering that Tampa offers an unmatched combination of skilled labor, urban growth, low costs and exceptional quality of life necessary for any employer to succeed in a highly competitive global economy.
1. Qualified Workforce
The Tampa Bay region has a labor pool of more than 2.9 million people that is well prepared to meet the needs of any employer. We’re home to more than 80 colleges, universities and technical schools, which produced over 35,000 new graduates in 2014. Companies can recruit talent from a diverse population of which nearly 20 percent is bilingual and features over 92,000 military veterans in the local workforce.
What’s more, they are educated and young – two qualities that companies find very attractive. Over 33 percent of adults 25 and older in Tampa had attained at least a bachelor’s degree, according to a 2015 CBRE Research report, “Scoring Tech Talent,” which ranked 50 U.S. markets according to their ability to attract and grow talent in the high-paying, fast-growing tech sector.
Tampa was the top-ranked Florida city on the tech talent list and our 15.6 percent tech-savvy millennial growth rate ranked second among small markets. The U.S. Census reports that this population group is growing 13 percent faster in Tampa Bay than the nation as a whole.
2. Urban Renaissance
Urban investment in many “second-tier” cities across the U.S. is bringing residents, especially millennials, back to the city in search of a live/work/play lifestyle, according to a 2015 CBRE report. Nowhere is this more evident than in Tampa’s downtown, where the Tampa Downtown Partnership reports the population has skyrocketed to more than 8,000 people in recent years, as millennials and retirees stream into the urban core. Developers such as Tampa Bay Lightning owner Jeff Vinik, Larry Feldman and Port Tampa Bay are eager to meet the market demand and have unveiled ambitious mixed-use projects. There are plans for several new high-rise or mid-rise residential complexes in the downtown core that could more than double the number of housing units to nearly 12,000. Residential construction often leads to increased commercial activity so those projects should add to the availability of quality, large blocks of Class A office space.
All of this presents an unusual opportunity and value proposition for Fortune 1000 companies, who can tap into a highly educated talent pool and benefit from brand new infrastructure and quality of life improvements.
Many employers are drawn to Tampa because of our low labor costs and no personal state income tax – a stark contrast from the 9 percent tax rate of primary markets like New York City. Similarly, Florida’s corporate income tax of 5.5 percent is competitive with other major metro areas, and is one of the most affordable housing markets in the Southeast.
Tampa offers cost savings for employers in other areas as well. For example, office rents represent the third-largest location-sensitive cost for a business behind labor costs and taxes, accounting for about 9 percent of operational expenses based on a 2014 KPMG international study. Tampa’s office rents are less than half that of Manhattan and less than two-thirds of Miami, with an average asking rate of between $28 and $31 per square foot for Class A office space – comparable to other metropolitan areas with a young, college-educated workforce such as Austin, Texas, and Atlanta.
What Tampa offers that those cities don’t, however, is the Bay-area lifestyle. In addition to being surrounded by water, Tampa is just a short drive from some of the best beaches in America and enjoys year-round great weather. It also boasts world-class museums, family friendly theme parks, great shopping, professional and college sports, and landmarks such as the Ybor City National Historic District. In fact, Money magazine named Tampa as one of “America’s 50 Best Big Cities” (#1 in the Southeast).
Bottom line – Tampa Bay is a great place to live, work and play, and more so each day as some of the world’s top companies join the growing list of local and global companies that make Tampa an exceptional place to do business.