South Florida’s office leasing party came to an end this year.
Case in point: The majority of this year’s nine biggest leases were renewals, though some of the tenants also expanded their spaces, and two were new signings.
The slowdown marks a turnaround from the leasing frenzy from late 2020 to last year. In the two year period, South Florida became a magnet for out-of-state companies that were attracted to the tri-county region’s business friendly climate. But as the pipeline dried up this year and longtime local firms downsized due to remote work, economic headwinds also played a role in the party’s end.
Elevated interest rates made credit lines more expensive, pausing companies’ expansion plans and prompting some to put space back on the market. In September, South Florida’s office sublease availability increased nearly 15 percent, year-over-year, according to CBRE data. Financial services firms and tech companies, the darling tenants during the market boom times, were top contributors to the sublease availability.
The two biggest leases this year were sale-leasebacks, with a pair of longtime South Florida-based companies selling their headquarters and then leasing back the spaces. But one of the firms, which leased back 238,000 square feet, will vacate the office next year and move into a 40,000-square-foot new headquarters elsewhere.
Here are the nine biggest office leases in South Florida in 2023.
Office Depot sale-leaseback
Office Depot sold its Boca Raton headquarters in April, and it’s still based at the campus.
Boca Raton-based Pebb Enterprises and Aventura-based BH Group bought the property at 6600 North Military Trail from Office Depot’s parent company, ODP Corporation, for $104 million. As part of the deal, Office Depot leased back 285,000 square feet for its headquarters. The lease term is for at least two years, an Office Depot spokesperson told The Real Deal at the time of the April deal.
The entire property spans over 651,000 square feet across 29 acres. Office Depot has been the main tenant since 2008.
Sale-leaseback deal No. 2
Logistics provider Ryder System also sold its longtime headquarters and leased back the space.
In March, Bridge Industrial bought the nearly 250,000-square-foot building at 11690 Northwest 105th Street in an unincorporated area of north Miami-Dade County for $42.1 million. Ryder, which has been based in the building since 2005, leased back 238,000 square feet.
Ryder, founded in Miami over 90 years ago, plans to move to a smaller headquarters in Coral Gables. The logistics giant leased 40,000 square feet at the Colonnade building at 2333 Ponce de Leon Boulevard.
Ryder will use its former headquarters until the interior buildout of the Coral Gables space is finished early next year, according to a company spokesperson.
UKG expands its headquarters
One company that expanded its headquarters this year is tech firm UKG.
UKG, or Ultimate Kronos Group, leased nearly 155,000 square feet at 2250 and 2400 North Commerce Parkway at the Weston Pointe campus in Weston. The July deal consisted of a renewal of an existing 140,600-square-foot lease and an additional lease of nearly 14,100 square feet. The space is UKG’s Florida headquarters. The firm is based in Lowell, Massachusetts.
UKG, which provides workforce and human resource management services, was formed following the 2020 merger of Ultimate Software Group and Kronos Incorporated.
Records show New York Life Real Estate Investors owns the four-building Weston Pointe.
JPMorgan stays in Brickell
JPMorgan Chase renewed and expanded its office lease in Brickell.
The New York-based bank now leases 132,600 square feet at 1450 Brickell Avenue in Miami.
Many businesses, including financial service firms, that moved or expanded to South Florida from 2020 to 2022 picked Brickell for their new outposts. In perhaps the biggest sign of the district’s growth, billionaire hedge funder Ken Griffin moved his Citadel and Citadel Securities to Miami last year, with plans to build a new headquarters tower for the companies on a bayfront site in Brickell. The companies are leasing temporary space in Miami.
Law firm also remains in downtown Miami
In September, Greenberg Traurig renewed its 128,500-square-foot lease in downtown Miami.
The law firm’s office spans five floors at the Wells Fargo Center at 333 Southeast Second Avenue. Greenberg Traurig was founded in Miami in 1967.
Records show MetLife owns the 47-story Wells Fargo Center.
Another law firm renews Miami lease
Holland & Knight also opted to stay in Brickell.
In June, the law firm renewed its 121,000-square-foot, six-floor lease at 701 Brickell Avenue in Miami. Holland & Knight has had an office at the tower since 1992, according to real estate deals social media account Traded.
Nuveen Real Estate, the investment arm of TIAA, owns the 33-story tower. Asking rents are about $110 per square foot, Traded reported.
Moss & Associates moving its HQ
Construction company Moss & Associates will move its headquarters to Fort Lauderdale.
In June, the firm leased the entire five-story, 119,000-plus-square-foot Park Center building at 6363 Northwest Sixth Way. The deal marks a renewal and expansion by Moss & Associates, which previously subleased two levels at Park Center.
Founded in 2004, Moss now is based at 2101 North Andrews Avenue in Wilton Manors. It plans to move into the Fort Lauderdale headquarters next year, according to the South Florida Business Journal.
Records show McLean, Virginia-based Gladstone Commercial owns Park Center.
Wells Fargo Center scores another big lease
IT and security management software company Kaseya will move its headquarters to the Wells Fargo Center.
In February, Miami-based Kaseya leased over 101,000 square feet at the tower at 333 Southeast Second Avenue. The firm, which started moving into the space this year, has four Miami offices. Its website lists 701 Brickell Avenue as the company’s headquarters.
The lease marked one of the two biggest new lease signings this year.
Bacardi moves US HQ
Bacardi moved its U.S. headquarters, though it stayed in Coral Gables.
In February, the family-owned spirits company took nearly 101,000 square feet in the South Tower at The Plaza Coral Gables mixed-use development. The tower is at 2901 Ponce De Leon Boulevard.
The new headquarters is near Bacardi’s current U.S. main office at 2701 Le Jeune Road.
Bacardi, which has its global headquarters in Hamilton, Bermuda, is led by the seventh generation of the Bacardi family. Facundo Bacardí Massó started the firm in 1862 in Cuba. Bacardi’s brands include Grey Goose, Bombay Sapphire and Dewar’s.
Agave Holdings, which has projects in the U.S. and Mexico, developed the roughly 2.6 million-square-foot The Plaza Coral Gables on 7 acres on the southeast corner of Ponce de Leon Boulevard and Sevilla Avenue. The Plaza’s other office building is the North Tower at 2811 Ponce de Leon Boulevard. The Plaza also includes a 242-key hotel, 174 apartments and over 160,000 square feet of retail.
Source: TRD analysis of brokerage data, as provided by Colliers and Cushman & Wakefield.
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