May 2011 Office Notes

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May 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-DADEOfficeNotesMay 2011 HAS MIAMI OFFICE MARKET... can see that happening between the 1st quarter of 2010 and the 2nd quarter. This chart is intended to be a snapshot of the current position/most recent change in rents (updated on a quarterly basis), and the following points should be noted: • the chart reflects overall trends rather than each micro-movement in rents HIT BOTTOM? • there is an inherently forward looking element to the positioning of markets on the cycle, involving brokers’ Last week, my research department released their Miami judgments on the anticipated strength and direction of office rent cycle graph which shows we are at the bottom future rental change of the rent cycle. CBRE tracks rent cycles on a global basis • this chart is based on the question: “how did rents and Miami is one of the US cities we track. move over the last 3-6 months, and how does this As you can see, it is clearly evident that Miami is at the compare with expectations for the next 3-6 months”. bottom of the market in office rental rates. The pendulum This rent cycle looks at Miami as a whole, so we in is about to swing to the landlord’s advantage. reality must take into account the nuances of individual To put Miami into perspective on a national basis, submarkets. One thing is clear -- the window of Chicago, San Diego, Los Angeles, Austin, Atlanta and opportunity is closing. Call me today to discuss Houston have not reached the bottom where we sit. creative ideas on how to take last minute While, New York, northern New Jersey, San Francisco, advantage of the rent cycle before it’s too late. and Boston are a step ahead of us. This rent cycle chart is subjective rather than a verifiable Click here to open full report calculation or “fact”. It is intended to represent, in a general sense, where the Miami office market stands. This rent cycle is based on information gathered by Miami Office Market Rent Cycles – Quadrants our research team who surveys the office brokers within the Miami CBRE Rental Decline Accelerating Rental Decline Slowing Rental Growth Accelerating Rental Growth Slowing office and actual deal information. 1Q09 3Q09 1 1 2 16 This chart looks at effective rents 2Q09 15 3 (i.e. what the tenant actually pays, 4Q09 after taking into account leasing 4 14 incentives, etc.) rather than “asking” 1Q10 5 13 rents. 3Q10 Keep in mind that markets can 6 2Q10 12 move in either direction along the 7 4Q10 11 1Q11 curve, and may “jump” from one 8 10 9 quadrant to another depending on changes in market conditions. You NB. Markets do not necessarily move along the curve in the same direction or at the same speed. The rental cycle is intended to display the trend in net effective rents :: Soutce: CB Richard Ellis © 2011, CB Richard Ellis, Inc.
  3. 3. OfifceNotesSUMMER IS COMINGREADY OR NOTI am already dreading the approach of summer. For during and afterme it means hot, sticky, bad hair days and my umbrella the storm. Consideris never where I need it. The other bad news about emptying the officesummer is that it marks the beginning of hurricane refrigerator prior toseason. As Hurricane Andrew survivors, my husband closing the office.and I spend June preparing for a stormy August and Also, CLOSESeptember. Now is the time to review your hurricane all office doors. This simple act can actually helpand disaster plans for your office. limit damage if a window breaks. Unplug yourThere are four key components for an effective equipment to avoid power surges during the storm.disaster plan: CREATE A CHECKLIST NOW. Distribute your hurricane 1) planning, plan at the beginning of the season and again once a storm is headed our way. 2) communication before, during and after the storm, 3) supplies, and COMMUNICATION 4) business continuity and contingency alternatives. This is also the time to make sure you have up-to- date information for all of your employees. CellPLANNING phone and landline numbers are a must. I believeA written plan provides a “go that social media will be a huge assetto” resource for your employees, CREATE A CHECKLIST NOW should we get hit by a storm. Twitter,vendors and clients. To prepare a Distribute your hurricane plan at the Facebook and LinkedIn could becomeworkable plan, you need to know beginning of the season and again valuable tools for connecting with clients,what will happen to your office once a storm is headed our way. vendors and employees.building in the event of a storm. You can post updates through theseThe majority of office buildings platforms. Change your office messageclose up once a hurricane warning is posted. This on your main line to explain the situation andmeans the building management shuts down your alternative ways to reach key personnel.air-conditioning and parks the elevator on the second My company has a toll free number that serves as a CB RICHARD ELLIS :: MIAMI-DADEor third floor. They do this to protect the building’s clearing house of information in case of emergencyinfrastructure. Check with your building for their and it distributes laminated wallet-size cards with keyprocedures and plans including security before, contact information to all employees. Elizabeth Santos has over 18 years of experience in office ELIZABETH SANTOS leasing with over $150 million of lease transactions during Office Specialist that time. Her primary focus is tenant representation. elizabeth.santos@cbre.com Elizabeth is currently on the Leadership Council for Take Stock in Children and a member of both the Doral T 305.779.3133 Business Council and The Commonwealth Institute. She is the 2009 Rising Star for CBRE’s Miami Office and Top 25 CB Richard Ellis, Inc. | Licensed Real Estate Broker for CBRE Florida May 2011
  4. 4. OfifceNotesSUPPLIES our out-of-state data centers in the event of a disaster so our files are safe and accessible. How will you handleDuring June, collect your office hurricane supplies. payroll during the post-hurricane recovery phase?Some helpful items are: Do you have insurance for business interruption?• heavy-duty plastic bags to cover computers, This is very common for retailers, but many office-based copiers, phone equipment and desks businesses do not carry this coverage.• bottled water and some easy packaged foods for a We can have another discussion solely about generators. quick snack or lunch so employees don’t have to use The pros and cons, who needs them, portable versus personal supplies fixed, how will it be re-fueled after the storm, will your• fans (perhaps some that are battery-operated landlord allow one? Generators are expensive so assess with batteries) just in case your air-conditioning is the costs versus the benefits carefully. It can take months damaged to gain approval from your landlord, obtain permits and• extra fully charged cell phone batteries for key finally install the generator, so plan ahead. personnelNOTE: do NOT store things in empty trash cans – I had What about your employees? How will youa tenant who did and the janitorial crew thought it was contact them after the storm? Discuss post-hurricanegarbage and tossed it. responsibilities with staff and find out now who will be available. Who will be evacuating and to where? How will you deal with childcare issues? During theBUSINESS CONTINUITY 2005 storm season, Miami-Dade schools were closed forOn the business continuity side, what is your plan if your about three weeks. Parents were reluctant to leave evenbuilding is severely damaged? One resource for you is teen-age children alone in a house without electricityme. I can help you locate temporary or new office space and a generator running.if your office is severely damaged. Your landlord may betoo busy to deal with your individual situation, but I canhelp you locate a new location so you can get back to CONCLUSIONbusiness as quickly as possible. After Hurricane Andrew, Common sense is the best tool for hurricaneBurger King had to relocate about 100,000 SF from preparedness. Give your employees time to get homesouth Dade to downtown Miami – it was a commercial safely before the storm and prepare their homes. Coverreal estate broker who had the market knowledge and your office computers and equipment with plastic tocontacts to get Burger King back to work quickly. My protect from water damage—even if the equipment iscompany has a variety of resources including construction not close to a window in case the water comes from themanagement and move management to help companies floor above you. Make sure your cell phone is chargedrecover after a disaster. and your car has a full tank of gas.During the 2005 season, several buildings were closed CB RICHARD ELLIS :: MIAMI-DADEfor days and even weeks due to damage. How will you For more information on preparing for hurricanesaccess your data? Who has your back-up tapes and and tracking the storms, the National Hurricanehow will you access them? Is your server off-site in Center website at http://www.nhc.noaa.gov/a safe location? My office can transfer service to one of PERSONAL NOTE This summer I have several ambitious plans and they don’t all involve vacation. My biggest plan is to go through every drawer and closet in my house to get rid of STUFF. My theory is if I have not used it in a year, out it goes to my favorite charity. Since it is so hot outside, this project gives me an excuse to stay in the air-conditioning over the weekend. My goal is that by the end of the summer, I should be clutter-free. Wish me luck! May 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.

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