Rents
for Class A office space in Miami are high, at $50 or more per square foot, and
will continue rising as the market tightens, real estate experts told attendees
at a conference Thursday.
Panelists
also said that, despite the city’s increasing traffic problems, they expected
sustainable demand growth for Miami commercial properties in the future, since
the city is an appealing location and a gateway to Latin America.
“The
market is tightening up,” said Angelo Bianco, managing partner at Crocker
Partners during the Bisnow panel event. “Developers are getting better rates
and lower concessions.” At the same time, he added, “Capital markets seem to be
taking a break and people are more cautious. Deals are taking longer to close.”
Asked
if office rents in Miami were becoming too expensive, W. Allen Morris, chairman
and CEO of The Allen Morris Co., said that rents here were high compared to a
city like Atlanta, “but they’re low compared to other global cities like New
York, London, San Francisco or Chicago.” If developers can find any additional
land – without condos – they would build more commercial space, Morris said.
Panelists
at the conference at the Wells Fargo Center in Miami also discussed attracting
new commercial clients. Many cities like Miami constantly compete to attract
new companies and their tech-savvy millennial employees. Smart
CEOs want to
ensure that they locate or relocate in a place where millennials will be
pleased with attractive, often non-traditional office space; nearby amenities
(restaurants, retail); transit options (millennials rely less on their own cars);
cultural opportunities and good schools. The city needs to develop more “live,
work and play” communities, they said.
“It’s
attractive to live in Miami,” said Rudy Touzet, CEO of Banyan Street Capital.
“Over the next 5 to 10 years, millennials will be moving to Miami, Tampa,
Atlanta. Things like education and transportation have to be improved,” he
said. The attractiveness of Miami “will fluctuate, but demand will be
sustainable if development is controlled.”
“It’s a
cool, international city,” Bianco said.
Parking
remains an issue, however. While parking availability is currently a necessary
part of an office complex, some developers are looking at making changes, such
as building parking garages that can easily be converted into other types of
commercial space as car use diminishes in crowded urban centers.
And
even though Uber and other companies have located their headquarters in
Wynwood, the trendy area has problems. “It’s not easily accessible by bus or
trolley routes,” said Barbara Savage, senior associate principal and Stantec
Architecture & Design. Wynwood doesn’t have the views of high-rise
buildings but the area has ample amenities and works well for “certain types of
clients in the range of 5,000 to 15,000 square feet,” she said. Art Basel, a
major international event and a big draw for wealthy individuals from the U.S.
and overseas, “made it challenging for people to get in an out of the area.”
Moderator
Brian Gale, vice chair at Cushman Wakefield, noted that four
projects have been proposed for Wynwood, totaling about 700,000 square
feet, but “We’ll have to see if they are developed,” he said.
Speakers
gave mixed reviews on the impact the new Trump administration would have on
future growth and business confidence.
The
government’s moves to reduce regulations in the Dodd-Frank Act “will be good
and will allow new credit” for real estate and the rest of the economy, Morris
said. The economy is growing and jobs are increasing, he added. But
restrictions on immigration could affect Miami. Overall, Morris expects
“positive growth” under the new government.
“I’m
disturbed by what we see in Washington,” Bianco said. “We are the place that
people go” for stability and investment. “Even after the financial crisis –
which we caused – people still bring their money here.” Trump’s “aggressive,
un-presidential behavior” and constant tweets are creating confusion. “No
one knows what he will do.” They should, at least, “take away his cell phone,”
he said.
Members
of a second Bisnow panel saw employees of the future working remotely from home
(or anywhere else); open, informal, shared workspaces, and an emphasis on
mixed-use “live, work, play” developments.
Echoing
some of the millennial preferences discussed in the earlier forum, the
panelists said these preferences will drive major changes in how and where
people work.
Innovation
and technology will play much greater roles for future employees. “Why own a
car if you can Uber everywhere?” asked Juliana Fernandez, founder of AEI.
“Why own an apartment if you can Airbnb? Where do I want to work today?”
Co-working
in shared spaces will
likely appeal to people who don’t want to always work from home. Moreover,
shared workspaces offer employees and the self-employed opportunities to meet,
exchange ideas, talk and collaborate with people from different businesses.
Other
members of workplace panel were: Laura Kozelouzek, CEO of Quest Workspaces and
the moderator; Grant Killingworth, first vice president, CBRE; John Guitar,
senior vice president, Brightline; Natalia Martinez-Kalinina, director,
Cambridge Innovation Center, Miami; and Edward Owen, Swire Properties.
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