Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Office Notes September 2010


Published on

  • Be the first to comment

  • Be the first to like this

Office Notes September 2010

  1. 1. O f f i ce NOTES from Elizabeth Santos News on the state of the Miami-Dade Office Market... Elizabeth Santos Senior Associate Brokerage Services | Office Properties T 305 779 3133 F 305 381 6462
  2. 2. CB RICHARD ELLIS :: MIAMI-DADE Elizabeth Santos | Office Specialist | 305.779.3133 | September 2010 VIEWPOINTS OPINIONS ARE LIKE NOSES – EVERYBODY HAS ONE! For this issue of Office Notes, we collected the opinion of leading Senior Fellow, Governance Studies at The Brookings economic experts who are looking at the economy from a macro Institution. For the complete article, click on the following viewpoint. Which expert most closely mirrors your own opinion? link: Do you have another expert you would recommend? I welcome economy_galston.aspx your thoughts and feedback. Throughout the summer, data signals have become more alarming. WHAT MY EXPERTS ARE SAYING Despite all the rhetoric about job creation, unemployment remains “Economic recoveries are characterized by periods of volatility, stubbornly high and the problem is becoming structural in nature and this recovery is no exception. The return to economic growth is (and, therefore, harder to solve). Consumer credit continues to clearly under way, although its pace weakened during the second contract while small companies find it difficult to access new bank quarter. Inventory restocking earlier in the year caused a spurt lines of credit. Housing activity is falling, and home values are in manufacturing activity worldwide, which boosted GDP growth poised for further declines as foreclosures increase. The trade in most regions. However, with this growth spurt easing, leading balance has taken an ominous turn, with exports stagnating and economic indicators are pointing to a more tepid recovery in the imports surging. More Americans are falling through the large economy going forward. These setbacks have created increased holes in the country’s safety net. risks to the recovery, but the general trend remains upwards.” From the August article “Why Another Fiscal Stimulus From the Global MarketView, September 2010, by CB Won’t Do” Mohamed A. El-Erian, CEO of Pimco and Richard Ellis Global Research and Consulting author of “When Markets Collide,” a New York Times and Wall Street Journal bestseller and named a book of WHAT OTHER EXPERTS ARE SAYING the year by e Economist. For the complete article click “Once the dust settles from the economic crisis of 2007-2009, we on the following link: are likely to enter a period of new normality, with lower household WhyAnotherFiscalStimulusWon’tDo.aspx debt, higher personal savings, and less consumption as a share of Gross Domestic Product. The effects of this transition will ripple “This week’s economic data (Sept. 6-10) went a long way toward through both the domestic and the international economy. At easing fears about a double-dip recession. A second downturn is home, some of our bloated retail infrastructure will disappear as not implausible, but worries that real GDP could fall into negative businesses shift their focus to producing more for export. Abroad, territory in the coming quarter now seem a little overblown. But, countries that have depended on exports to fuel economic growth before we pop the champagne cork, our forecast still calls for will have to shift toward domestic consumption, which means sluggish economic growth through 2010 and gradually increasing lower savings rates and a diminished appetite for U.S. government over the course of 2011.” debt, putting pressure on U.S. fiscal policy.” From the Wells Fargo Securities Weekly Economic & From the September article, “The “New Normal” For the Financial Commentary for Sept. 10 U.S. Economy: What Will It Be?” by William A. Galston, 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. ©2010 CB Richard Ellis, Inc. The information above 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.
  3. 3. CB RICHARD ELLIS :: MIAMI-DADE Elizabeth Santos | Office Specialist | 305.779.3133 | September 2010 My thoughts... All these economists make me think about a line from a Dolly Clearly the “New Normal” is here to stay. My prediction is that Parton song that my Brazilian husband quotes regularly. As even if business activity increases and companies see profits Dolly Parton sang, I’ll be fine and dandy. Lord, it looks like begin to increase, the added expense of personnel (including another hard candy Christmas. I’m barely getting through additional real estate) will be postponed for as long as possible. tomorrow, but I won’t let sorrow bring me way down.” A savvy business will not want increase overhead until these increased profits appear stabilized and long-term. Prudent Click on the following link to listen to the song on YouTube leaders need honest, expert advice as they navigate through this new economy. Let me help you with the real estate portion of your equation. Contact me for a free lease analysis What’s Happening in the Trenches Clearly we are in this downturn for the long-haul. My office has a monthly meeting focused on the office portion of commercial real estate. The number of large tenants (10,000 sf and up) seeking office space has declined when compared to September 2009. We currently are tracking 29 companies seeking almost 1 million sf . This is almost half of what we were tracking in September 2009. Interestingly enough, the 54 tenants sought 1.2 million sf of office space – almost the same square footage as today. Of these 54 large tenants from 2009, about 20 ended up signing either a renewal or a new lease. Some of these tenants may simply be testing the waters or trying to leverage a better negotiating strategy with their landlord. Some still show up on our tracking list a year later. With large blocks of office space available, the big tenants have serious options to consider and may be able to upgrade their office space either by moving to a better building or planning a new, more efficient space which lowers their footprint and ultimately their overhead. Another clear trend is that the number of subleases is declining. This actually benefits both landlords and tenants. Tenants are not stuck with surplus space they must dispose of at fire sale pricing and landlords are not competing against these bargain basement spaces. The next two years (2011 and 2012) are predicted to have quite a bit of lease rollover from expiring leases. We have not seen much in new tenants to the market other than some smaller transactions of less than 10,000 sf. The new buildings are slowly filling up with existing tenants moving from other locations in Miami. Clearly Miami is experiencing its own brand of the “New Normal”. Personal Note The “New Normal” is shaping up to be more realistic and certainly more painful era for quite a few people. For me personally, I have one child finishing college in a year and next hopefully on to medical school followed by another entering college in four years and I have this crazy idea called retirement. With these heavy expenses looming, the Santos Family has been cutting back. Facing the New Normal is daunting at times.
  4. 4. In 2010, “Going Green” Means Going with the Industry Leader CB RICHARD ELLIS :: MIAMI-DADE Elizabeth Santos | Office Specialist | 305.779.3133 | September 2010 CB Richard Ellis is proud to be the only commercial real estate services firm to attain all of these leadership metrics: Pledge to becoming carbon neutral Be named one of Newsweek’s 50 greenest companies Benchmark more than 1,400 buildings in EPA EnERgy StAR® and capture the Sustained Excellence Award for 2010—reflecting achievement of Partner of the Year status in three consecutive years Win both USgBC’s Leadership Award and Corenet’s Sustainable Leadership and Design Award for accomplishments in sustainability Manage more than 50 projects totaling more than 30 million sq. ft. that have attained USGBC’s LEED® EB status Employ more than 400 professionals who have achieved LEED® accreditation Commit more than 200 million sq. ft. of managed space worldwide to participating in Earth Hour 2010 Earn a Carbon Disclosure Project score that is nearly double the average for all companies* CB Richard Ellis has the resources, knowledge base and first-hand experience in its own operations to help turn sustainability goals into reality. to learn more, contact Dave Pogue, national Director of Sustainability, at 408.453.7444 or GOING GREEN... Go paperless and receive this newsletter electronically. Sign up by sending an email request to: