The increasingly significant office market is just one of the many sub-sections of Miami’s real estate market that is making its way back. The 2012 report on Miami’s office market, prepared by Jones Lang LaSalle for the Commercial Industrial Association of South Florida (CIASF), provides great insight into Miami’s office market. In the report’s summary, we see that vacancy rates are declining and properties are trading.
The report points out that higher vacancy rates in larger buildings have discouraged trading, but even that has shifted since the release of the report early this summer.
A prime example of this shift is the closing of the largest office deal since 2008, in which Crocker Partners purchased the 34-story, 786,267-square foot Miami Center located at 201 S. Biscayne Blvd. for $262.5 million. The Daily Business Review reported that the property was 84% leased at closing. And this high profile deal is likely to be just the beginning.
Office Market Turnaround in Two Years
The consensus at the panel discussion that unveiled the report is that the office market will likely make a true turnaround in two years. Not surprisingly, international investment from countries like Brazil, Canada, Mexico and Colombia will have a significant impact on the rebound. Europe and Asia will undoubtedly play major roles as well.
And while job creation and immigration are increasing the demand for office space in Miami according to the report, one of the panelists, Juan Ruiz, a director at Codina Realty Services, indicated at the panel discussion that there are not a lot of new market tenants. Instead, much of the leasing activity is coming from companies and firms moving from other locations in the region.
Miami’s ability to attract foreign and domestic investment, new businesses and jobs will continue to play a key role in the re-emergence of its office market. We are definitely making great progress on all fronts.