March 2011 Office Notes


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March 2011 Office Notes

  1. 1. CB Richard Ellis777 Brickell Ave, Suite 900Miami, FL 33131OfficeNOTESNews on the state of the Miami-Dade Office Market...
  2. 2. CB RICHARD ELLIS :: MIAMI-DADE OfficeNotes March 2011 OFFICE SPECIALIST Elizabeth Santos 2010 YEAR END STATS T 305.779.3133 CB Richard Ellis, Inc. | Licensed Real Estate Broker AND 2011 FORECAST2010 was a year of transition for the Miami office Landlords have been voicing their desire to cut backmarket. Large tenants made bold moves, trophy as- on concessions, however, market conditions maysets were traded and 1.5 million square feet of new dictate the persistent need for aggressive concessionsoffice buildings were added to the market inventory. to keep and attract tenants. Large tenants continueThe substantial increased inventory of Class “A” of- to have viable options for relocation so their currentfice space continues to pressure existing buildings to landlords will be hard pressed to retain them.lower lease rates and offer competitive concession One interesting trend is the small amount of subleasepackages. space available. For example, at the end of 2010,Although our statistics are showing positive ab- our database shows 95,858 square feet of availablesorption for 2010 for Brickell sublease space in the Miami Airprotand Downtown (CBD – Central WE FORECAST the trends for 2011 office submarket. At year-end 2009, weBusiness District), these numbers leasing to include a continued flight to had 153,661 square feet. Thiswill shift to a negative number by trend of decreased sublease space quality. Tenants will be able to move intothe end of the first quarter in 2011 is a positive trend for both tenants higher quality buildings with the marketas tenants move from one build- and landlords. Landlords are noting to another. Coral Gables was conditions still favoring tenants competing with space being of-hardest hit last year, losing almost fered at fire-sale prices and fewer150,000 square feet of tenants. The completion of tenants are stuck with excess office space wreaking396 Alhambra will keep Coral Gables a strong ten- havoc on their bottom line.ant market through 2011. We are seeing positive signs of economic recoveryWe forecast the trends for 2011 office leasing to with companies making small expansions andinclude a continued flight to quality. Tenants will still modest additions to staff. As companies feel morebe able to move into higher quality buildings with confident as the economy continues a slow recovery,the market conditions still favoring tenants. we anticipate more moderate, albeit slow, growth in both staff and office square footage. For the full Fourth Quarter 2010 MarketView visit Elizabeth Santos has over 18 years of experience in office leasing with over $150 million of lease transactions during that time. Her primary focus is tenant representation. Elizabeth is currently on the Leadership Council for Take Stock in Children and a member of both the Doral Business Council and The Commonwealth Institute. She is the 2009 Rising Star for CBRE’s Miami Office and Top 25 for CBRE Florida © 2011, CB Richard Ellis, Inc.
  3. 3. FOURTH QUARTER 2010 MARKET STATISTICS OfifceNotes Avg Asking Dir Total Availability Total YTD Net Construction Under Submarket Building SF Lse Rate ($/SF/Yr) % Vacancy % Absorption Completions Construction Full Service Gross Airport West 10,182,044 25.2 19.1 $24.82 (7,608) 0 0 Brickell 6,536,894 27.4 19.0 $35.49 81,319 0 605,886 Coral Gables 6,147,932 24.1 17.3 $33.39 (148,526) 0 229,000 Downtown Miami 7,605,092 27.5 19.4 $33.53 69,488 0 0 CBD Total 14,141,986 27.4 19.2 $34.44 150,807 0 605,886 Suburban Total 30,124,627 24.7 18.1 $27.25 (90,197) 0 229,000 Overall Total 44,266,613 25.6 18.4 $29.87 60,610 0 834,886 Class A Total 19,863,905 24.4 18.1 $36.10 518,993 0 834,886 Class B Total 18,163,864 26.6 19.4 $26.12 (258,185) 0 0 Class C Total 6,238,844 26.7 16.8 $21.97 (200,198) 0 0Source: With several large tenants slated to move in 2011, the CBD and Airport West submarkets are anticipating increased negative absorption in the next first quarter of 2011. 2010 TOP 10 LEASES SF Tenant Submarket 100,000 Amadeus Airport West 2009 had overall total availability of 21.4% and total vacancy of 14.9%. It appears the 100,000 Discovery Channel Airport West market is reaching the bottom. 96,012 Nova Southeastern Univ. Kendall In comparison, 2009’s top 10 leases averaged less than 40,000 square feet CB RICHARD ELLIS :: MIAMI-DADE 91,000 Wells Fargo Downtown Miami and were primarily renewals of smaller square footage. 2010’s strong activity by 80,000 Oceania Airport West large tenants is an indication of recession recovery. 75,000 Vitas Downtown 65,000 Hunton & Williams Brickell 60,000 State Farm Airport West 50,000 Banco Sabadell Brickell March 2011 40,000 JP Morgan Chase BrickellSource:
  4. 4. FEATURED PROPERTY OfifceNotes Belgravia Management, LLC, the Hialeah Expy LeJeune Rd S. East 4th Ave Palm Ave O new owners of Airport Financial 826 ke e ch ob ee NW 62nd St SITE NW 22nd Ave NW 17th Ave Rd NW 27th Ave NW 32nd Ave Center, have selected me as NW 2 d A NW 7th Ave MIAMI NW 54th St NW 72nd Ave Palmetto Expy SPRINGS their exclusive leasing agent. y NW 46th St kw East Dr P Airport Expy Curtiss This 100,000 sf building sits on S NW 36th St NW 10th Ave Ro ya lP 95 the northeast corner of Miami MIAMI oi Ave nc INTERNATIONAL S LeJeune Rd ia AIRPORT na NW 37t h B NW 20th St International Airport. lv d . 836 Dolphin Ex py If you want to escape the traffic W Flagler St congestion and construction of SR 836, consider this building. The ownership has launched an extensive renovation program to update it. We will be having a grand opening party later this year to re-introduce the building. In the meantime, call me for more information. PERSONAL NOTE My 15-year-old son is the lacrosse goalie for Palmetto High School’s JV team. The season is almost over and his team has done well. These boys have been playing together for several years and it shows. My husband and I attend every game. We keep the statistics for the team – mainly as an effort to remain calm as balls are fired at our precious child. It’s a great sport and fun to watch! CB RICHARD ELLIS :: MIAMI-DADE March 2011 © 2011 CB Richard Ellis, Inc. CB Richard Ellis statistics contained herein may represent a different data set than that used to generate National Vacancy and Availability Index statistics published by CB Richard Ellis’ Corporate Communications Department or CB Richard Ellis’ research and econometric forecasting unit, CB Richard Ellis—Econometric Advisors. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis.