Office buildings in South Florida are not tenant-driven any longer, according to the latest reports for the second quarter of 2012: building owners and those interested in investing in office space as a real estate investment got some good news this month.
In the past, tenants could ask - and get - things like free rent and other cushy concessions, but now the worm may have turned and tenants may now be faced with landlords asking for higher rents and not as ready to make concession deals. Consider the following:
1. The Sun Sentinel is reporting that highrise office buildings like CityPlace Tower in West Palm Beach have over 90% occupancy.
2. A 2012 Report by Cushman & Wakefield for the second quarter of this year shows Broward County's overall vacancy in the second quarter at 16.7% and Palm Beach County's vacancy at 20%.
3. The latest market report from Jones Lang LaSalle finds major renewals of office leaseholds in Miami, with GlobeSt.com using the report's Norwegian Cruise Line’s 199,000-square-foot renewal as as an exmaple of corporate tenant retention gaining in strength here in South Florida. Moreover, office tenants are touring the Miami real estate market for space, GlobeSt giving examples of accounting firm Marcum LLP; Morrison, Brown, Argiz & Farra; and HomeServe USA.
4. Finally, the CoStar Group is reporting that South Florida's office building vacancy rate was down over the previous quarter in 2012, with net absorption totaling positive 689,344 square feet. They report tenants in 2012 that include:
Citrix Systems for 54,902 square feet at Park Center;
University Of Miami Bascom-Palmer for 52,205 square feet at Crossroads 3; and
State Farm Mutual Automobile Insurance for 50,000 square feet at Convergys at Westpoint Centre.
CityPlaceTower in West Palm Beach is 90% Occupied.