Spec office development ramps up in Miami: report

Miami /
Aug.August 10, 2016 05:15 PM

Despite a flattening vacancy rate, a new report shows the number of upcoming speculative office projects in Miami is beginning to ramp up.

According to a mid-year report from brokerage Avison Young, Miami’s vacancy rate ticked upward year-over-year to 14.2 percent, while absorption — especially in suburban submarkets — rose significantly to 1.2 million square feet.

The relatively high absorption rate is a welcome change for Miami’s office market, which struggled with high vacancies during the real estate bust following a period of oversupply.

But in the past year, it’s also led to a tightening market. A lack of new office construction, which competes for land with more easily developed multifamily projects, has led to a boom in rental prices. As previously reported by The Real Deal, downtown Miami and Brickell in particular are close to their previous peaks in 2008.

According to the report, Brickell City Centre’s ability to lease 97 percent of its first office tower, Three Brickell City Centre, within months of it opening shows the appetite for Class A space from tenants.

About 2 million square feet of new developments in the pipeline could help close the demand gap: TIAA and Allianz Real Estate of America are partnering up to build a speculative office tower with nearly 250,000 square feet in their Waterford at Blue Lagoon corporate park near the Miami International Airport.

Work is already underway for Two and Three MiamiCentral, a pair of office buildings All Aboard Florida is developing as part of its MiamiCentral train station.

The largest project in the pipeline, Tibor Hollo’s super-tall One Bayfront Plaza, is still in the planning phase. If delivered, the project would bring 750,000 square feet of Class A space to the downtown area — along with a hotel, residential and retail component. — Sean Stewart-Muniz


Related Articles

arrow_forward_ios
Make-A-Wish South Florida CEO Norman Wedderburn and 350 Northwest Sixth Street (Getty, Google Maps)
Make-A-Wish pays $8M for Overtown dev site
Make-A-Wish pays $8M for Overtown dev site
Phillips Point office towers with Related’s Stephen Ross (JLL, Getty)
Related Cos. closes on West Palm office towers for $282M
Related Cos. closes on West Palm office towers for $282M
Saeed Amidi and Moishe Mana (Getty, iStock)
Plug and Play to open downtown Miami office
Plug and Play to open downtown Miami office
(iStock)
Empty cubicles: Vacancies up in South Florida office market in Q4
Empty cubicles: Vacancies up in South Florida office market in Q4
Sagi Shaked and 201 North Pine Island Road (Shaked Law, Google Maps)
Former Plantation fertility clinic sells for $8M
Former Plantation fertility clinic sells for $8M
Michael Cammarata (Linkedin, Neptune Wellness Solutions, iStock)
Cannabis wellness company relocates HQ to South Florida
Cannabis wellness company relocates HQ to South Florida
Jorge Perez and Jon Paul Perez with Terminal Island (Getty, iStock)
Related gets height increase needed for Terminal Island office project in Miami Beach
Related gets height increase needed for Terminal Island office project in Miami Beach
Rendering of the Dorsey with Alex Karakhanian, Jon Paul Perez and Tricera’s Scott Sherman and Ben Mandel (iStock)
Related scores $88M construction loan for Dorsey project in Wynwood
Related scores $88M construction loan for Dorsey project in Wynwood
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...