Tom Woodard
Director, GRS Group
(561) 325-9857
[email protected]
The Miami area reportedly has a problem that developers in many metro areas would be jealous of – the need for more office construction.
Though second-quarter vacancy increased year over year, the problem the area faces is a lack of class A space in urban cores, which have not seen new-office development on a large scale for a decade or more, in some cases, according to a Colliers International report.
The problem that the area faces is that many firms in technology, life sciences, healthcare and international business want to be in South Florida’s major cities, but those businesses aren’t finding spaces that are large enough and as contemporary as they would like.
That has led to a current 2.2 million square feet under construction in Miami–Dade County. The last cycle of office building in Downtown Miami was a decade ago, according to Colliers, but it looks as though that could be ramping up again. Just over 266,000 square feet was added in the last two years. Now there is 418,000 square feet underway at MiamiCentral, a mixed-use building with 12 stories and includes a food hall. There is also Panorama Tower, a mixed-use building that is Florida’s tallest, at 85 stories, and includes apartments, retail, and a Hyatt Centric hotel, was finished in July.
To the north, Fort Lauderdale is getting what Colliers says is the first class-A office building downtown for 10 years. 201 East Las Olas brings just under 357,000 square feet of leasable area at 25 stories. It will also have just over 17,000 square feet of retail when it is set to open in late 2020. Colliers points out that vacancy rates in Downtown Fort Lauderdale are at 12.2 percent, down from 18.3 percent during the recession.
Finally, West Palm Beach, which also hasn’t seen new significant office development for about 10 years, has some large projects on tap, including One West Palm, a mixed-use complex with two 30-story towers planned for office, hotel rooms and apartments. Related, which already built the large CityPlace development in 2008, plans to build 360 Rosemary, with 285,000 square feet of office.
For the most part, developers are trying to make their projects attractive to potential incoming tenants by building them near transit stations, which could make them more favorable for workers. One thing Colliers does caution, though, is for new office construction to be tempered, so the new supply does not overtake incoming leasing demand.
About GRS Group:
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.