The bottoming out of the commercial market in South Florida has some businesses taking advantage and upgrading office space.
That’s especially true in downtown Miami and the office market near Miami International Airport that combined have around 2 million square feet of Class A office space coming on the market in 2010.
“You have new supply added and you have new opportunity,” said Bob Orban, senior vice president and branch manager at tenant representative advisory firm Studley.
In some cases, Orban said, tenants are moving up to Class A office space from Class B or Class C. In other instances, tenants are moving within the same class but to a newer building or renovated space. And they’re finding landlords willing to give them free months of rent or paying moving costs.
“Every step of the way, our clients are saving money,” Orban said.
Two new Miami office towers are attracting major firms: The Met 2 Financial Center, a 47-story office tower, has 700,000 square feet of Class A office; and 1450 Brickell, a 35-story tower, has about 600,000 square feet of Class A office space.
The national accounting firm Deloitte has rented 50,000 square feet at Met 2. It’ll be joined by the law firm Greenberg Traurig, which signed a lease for 150,000 square feet. At 1450, Brickell, law firm Bilzin Sumberg Baena Price & Axelrod plans to take 80,000 square feet.
It’s happening on a smaller scale as well. Last week, Visit Us, the U.S. subsidiary of Iberostar Hotels & Resorts, announced it’s moving from Coral Gables to 3,000 square feet of Class A office space at One Park Square in Doral, which is a new building.
Tere Blanca of Blanca Commercial Real Estate, a broker who represented the developer, said the building’s location near major highways and close to the airport works well for an international firm like Visit US.
Still there was the draw of the new building.
“We commuted to Coral Gables for years because our hometown of Doral lacked true luxury office space,” said Monica Santos, director of sales for Visit Us. “One Park Square at Doral’s opening prompted us to make a move.”
Shay Pope, senior managing director at Newmark Knight Frank, said there may be an oversupply of office space in submarkets like Brickell and Airport West. But also he’s seeing a lot restructuring of lease agreements to unlock capital so tenants stay in place with a better deal, he said.
It’s all dictated by how much cash flow a tenant represents to the building owner and that owner’s debt, he said.
But for those who want to move up, Orban said, now’s the time to craft a transaction that’s an “absolute home run” and that will “look more and more attractive in a few years” when the market swings back in the landlord’s favor.