Welcome to the Miami Office Notes blog! We will be primarily discussing the Miami office market and provide direction for office tenants with specific lease issues. However, since one topic can become monotonous (the topic of my children is the exception), we will also delve into general business topics and other areas of commercial real estate.
The Miami office market is an interesting one. With almost 44 million sf of office space, Miami ranks as the 31st largest office market. New York, Chicago and Houston are the top three US markets. By comparison, our 221 million sf of industrial space ranks 21st in the country. Developers have added 1.6 million sf of new office space over the past two years with another 940,000 sf approaching completion this year. With this 6% increase in inventory coupled with vacancy rates at 18%, the next several years are shaping up to favor the tenant instead of the landlord. That is good news for office tenants.
However, these are challenging times for many companies. Many companies will be unable or unwilling to seize this opportunity in our real estate cycle. Over the past several years, we have seen many multi-national companies close their Miami office as a cost-cutting solution. Even though Miami is the Gateway to Latin America, companies are retreating to the mother ship to weather the storm. One of my challenges has been to save companies enough money on their office rent expense to survive the downturn. Another challenge is disposing of Miami office space when the parent company has closed
My focus has been on office leasing for 18 years. Please take a look at my background in the About section of this blog. With literally hundreds of transactions under my belt, I have a case study for almost any situation, so we will tap into my “war stories” from time to time. I welcome your thoughts and comments.