The document discusses trends in the Fort Lauderdale office market from 2018 to present. It notes that while coworking space has seen limited growth, there has been strong interest from coworking operators. Additionally, there has been a "flight to quality" trend where tenants upgrade from lower-tier space to more institutional-grade assets. Specifically, nearly 288,000 square feet has been leased by tenants upgrading from untracked Class C space. Many of these upgrading tenants have been large companies moving to Class A properties. This upgrading of space by true occupiers has helped improve stability and increase landlord values in the Fort Lauderdale office market.

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Snapshot
Flight to quality isn’t just for new construction and high-
end office product
Source: JLL Research
Marc L. Miller | marcl.miller@am.jll.com
• While coworking operators have been the driving force for leasing volume in most markets, their presence has
been fairly limited in Fort Lauderdale. Over the previous 18 months, just under 52,000 square feet has been leased
by new-to-market coworking operators (i.e., excluding renewals). Although, there is currently strong interest
among those users in the Fort Lauderdale office market.
• Another major trend in many markets has been the flight-to-quality, with much of the attention focused on new
construction and top tier properties. For example, the premier project under construction in Fort Lauderdale has
pulled tenants from high-end Class A properties, and those high-end properties have seen interest from tenants in
properties from lower tier Class A buildings.
• But the real interesting story occurring in Fort Lauderdale since the beginning of 2018 is the amount of tenants
relocating out of untracked Class C office or flex product into more institutional grade assets.
• In that time, nearly 288,000 square feet of space has been leased by these types of users. While that represents
only 7.6 percent of the 3.8 million square feet of leasing activity since the start of 2018, it accounts for almost 27.0
percent of all new-to-market leases, which result in net new absorption. And while it could be assumed this
activity would be comprised of small users, that is not the case. Some high profile tenants that executed such
transactions are SR Technologies (77,200 s.f. at Sawgrass Tech Park), E-Builders (28,100 s.f. at Sawgrass Lake
Center), and Tambourine (25,000 s.f. at Trade Centre South).
• From an economic standpoint, this seems counterintuitive considering overall business investment has been
stagnant over that period of time, but companies – large and small – are improving their real estate, which is a
capital expense not necessarily considered an investment. Additionally, nearly half (47.8%) of the square footage
leased tenants upgrading their space occurred in Class A product.
• This is also helping to improve the office real estate market in Fort Lauderdale, as true occupiers are driving
occupancy gains rather than coworking operators, which have accounted for 41.0 percent of absorption gains
nationwide since 2018. This bodes well for the Fort Lauderdale office market, providing stability and increasing
values for landlords.
August 15, 2019
Fort Lauderdale
Leasing activity
2018 to present
Upgrading tenants
Traditional leasing
26.8%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Squarefeetleased Where are upgrading tenants going?