Businesses adjust to changing commercial real estate market

Posted at 10:00 AM, Apr 19, 2021
and last updated 2021-04-19 18:01:11-04

TAMPA, Fla. — At Direct Mail 2.0 they don't do what you might think.

"We don't print anything. We don't mail anything," said CEO Brad Kugler.

Kugler says their technology helps improve the response rate of direct mail — and it's led to growth.

"We have 21 employees. A year ago, we had 12."

Right now, Direct Mail 2.0 is in a 2,100 square foot space in downtown Clearwater.

"I'm kind of old school. And as soon as we were able to, I strongly encouraged anyone that didn't have a personal situation to come back to the office," Kugler said.

Kugler says having everyone together has made all the difference.

"We are a very collaborative, communicative group, and I really needed and felt that energy and the vibe helped us grow. And honestly, we took off right after the end of the shutdown last April," said Kugler.

Not only has Direct Mail 2.0 been able to thrive during the pandemic, but they are also expanding, getting ready to move into a much bigger office.

Realtors say the last year has been surreal when it comes to commercial listings, with some businesses growing and others suffering.

"There are some people that are just dying on the vine because of the restrictions. Then you have others that are just doing better than they have done in quite some time. It's just crazy," said Jim Jacob, owner of Jacob Real Estate Services.

"We've seen a lot of sub-leasing going on. Everybody panicked initially at the beginning. They had to go and work remotely. Remote work is here to stay. But the office is as well," said Liz Menendez, a commercial realtor with Berkshire Hathaway and CCIM Florida Chapter President.

Brian Alford analyzes real estate market trends in the Tampa Bay area for CoStar Group.

He says the economy here has weathered the pandemic.

When it comes to industrial space, it's like nothing ever happened.

He says retail has seen its share of closings but is still in a good place.

But office space was hit hard.

There is now a record 2.1 million square feet available.

"A lot of them are empty. They are leased. But there has been a dramatic shift to working from home. But that is changing. We are seeing a lot of firms heading back," said Alford.

The available office space could lead to growth from out-of-state companies.

There are also 1.2 million square feet under construction, and new developments, including Water Street downtown and Mid Town on North Dale Mabry.

"Maybe we can help attract other firms to the business-friendly climate we have here in Florida. We certainly have the available space," said Alford.

"People are still coming to Tampa. Businesses are still moving. This is a great spot. We've got a lot of people from other states moving to Florida. And Tampa is one of the best metropolis areas," said Menedez.

"This area was booming long before I was born. And I was born in Tampa. And it will be booming long after I'm not here anymore," said Jacob.

Alford says we will know more about how businesses will return to offices in the next six months.

But he doesn't expect the extensive work-at-home trend that many feared.

"People's memories are short. Maybe if the pandemic had hung around 2-3 years, it might be different," said Alford.