Summary List Placement
It’s Wall Street of the (far) south.
In just a few months, that moniker has been attached to South Florida, an outlier market with warmer climes where major financial firms have migrated to. Goldman Sachs, Citadel, and Blackstone are either opening offices or rumored to be close to leasing space.
Meanwhile, much of the nation’s office market has remained moribund for the past year, as the pandemic spurred tenants to work remotely and even reevaluate the office’s role as the bedrock for culture, productivity, and collaboration in the workplace.
But South Florida has appeared to buck that slowdown: Office-leasing experts, landlords, and developers report that over 1 million square feet worth of inbound tenants have been exploring the market in recent months to either relocate or set up satellite spaces.
That’s not to say that the pandemic hasn’t been felt. Office vacancy across Miami’s central business district, for instance, rose to 16.1% in the fourth quarter of 2020 from 13.7% at the end of 2019, according to CBRE data. There were 530,000 square feet of leasing deals in the fourth quarter compared with 880,000 square feet in the same period the year prior, CBRE said. Average asking rents remained essentially flat year over year at $44.45 per square foot, according to CBRE.
Leasing experts say that developers who either are underway with new office projects or planning to break ground have seen an outsize share of the demand as a wave of inbound tenants have focused in on gleaming new spaces.
“There really is a flight to quality,” said Alan Kleber, a managing director at JLL who has helped arrange some of the area’s headline leasing transactions in recent months, including Blackstone’s recent decision to open a roughly 40,000-square-foot outpost in downtown Miami.
“Tenants today are attracted to the better-quality spaces with natural light and newer ventilation that make them safer post-COVID,” Kleber added. “This is the segment of the market that is especially in demand.”
Here are some of the developers and builders best positioned to capitalize on the interest in the Sunshine State.
Justin Oates, vice president at Cain International
Before the pandemic started in December 2019, the real-estate developer Cain International tapped Justin Oates to help oversee the construction and leasing of a new office tower it was raising in downtown Miami in partnership with OKO Group.
Oates would move from New York City for the job, exactly the kind of migration that has become increasingly commonplace amid the pandemic, as companies and executives seek Florida sunshine as a balm for months of lockdowns and social distancing, along with the state’s low taxes and business-friendly climate.
The project, a 57-story 640,000-square-foot office tower at 830 Brickell Plaza, has drawn activity. WeWork leased about 140,000 square feet to anchor the building, which is scheduled for completion in 2022. A spokeswoman from the coworking giant, which scaled back its footprint nationally after a failed initial public offering in 2019 and as its business dipped during the pandemic, told Insider other Miami locations it operated had performed well …read more
Source:: Business Insider