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
Rendering of 830 Brickell office tower; Cushman & Wakefield's Brian Gale, JLL's Manny De Zárraga, Avison Young's Donna Abood, Dwntwn Realty Advisors' Tony Arellano and Stephen Rutchik. (Credit: OKO Group and Cain International, JLL, CW, Dwntwn Realty Advisors, Cushman & Wakefield, Avison Young, Getty, 830 Brickell)
Meet the commercial brokers making bank in Miami
Meet the commercial brokers making bank in Miami
Brick & Timber's Jesse Feldman and Glenn Gilmore, Tricera Capital's Ben Mandell, and Lndmrk Development's Alex Karakhanian with Cube Wynwd (Brick & Timber, LinkedIn, Tricera, Lndmrk Development, Getty Images)
Brick & Timber to buy Cube Wynwd office building for $60M
Brick & Timber to buy Cube Wynwd office building for $60M
Ken Griffin in the center, with Brickell (right) and Palm Beach (below)
Ken Griffin’s Citadel comes to Brickell — and supercharges the market
Ken Griffin’s Citadel comes to Brickell — and supercharges the market
Keiser University CEO Arthur Keiser in front of 1900 West Commercial Boulevard and 1500 Northwest 49th Street in Fort Lauderdale (Keiser University, Keenan Development Group, Getty Images)
Keiser University sells pair of Fort Lauderdale office properties for $58M
Keiser University sells pair of Fort Lauderdale office properties for $58M
From left: MHCommercial Real Estate Fund II's Jordan Paul, Dung Lam and Neil Merin along with the Yamato Office Center in Boca Raton and the Bridge Point Powerline Road in Pompano Beach (NAI Global, LoopNet, Getty Images)
Lease roundup: FirstService leases in Boca, PlantLab in Pompano Beach
Lease roundup: FirstService leases in Boca, PlantLab in Pompano Beach
From left: Jorge Mas, Swire’s Kieran Bowers, David Beckham, and Stephen Ross
Beckham’s soccer stadium; Swire, Ross’ Brickell City Centre tower rezonings get preliminary commission OK
Beckham’s soccer stadium; Swire, Ross’ Brickell City Centre tower rezonings get preliminary commission OK
Related Group’s Jorge Pérez and Jon Paul Pérez with 2999 Northeast 191th Street (Related, Google Maps)
Related, partner pay $51M for Aventura mixed-use dev site
Related, partner pay $51M for Aventura mixed-use dev site
From left: One Flagler in West Palm Beach, 830 Brickell in Brickell, and Eighteen Sunset in Miami Beach (Getty, Related Southeast, LoopNet, Koniver Stern Group)
Spurred by new-to-market firms, South Florida office rents hit record highs
Spurred by new-to-market firms, South Florida office rents hit record highs
arrow_forward_ios

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

Loading...