The Booming Office Space Sector in Miami: A Detailed Analysis
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The movie Office Space came out in 1999, but the stereotypes around actual office space still abound. The reality, thankfully, is far different than what movies like Office Space and Horrible Bosses depict. Office space is fluid, flexible, and more in vogue than ever before.
Employers are insisting their top talent break away from the home office and go back to working in person.
One area where office space is doing quite well within the commercial real estate framework is Miami, a booming city in its own right. Writing about Miami feels like the middle of a love affair: when it’s good, it’s actually great, thank you very much.
Commercial real estate enthusiasts across the real estate spectrum have long understood Miami’s power, but it’s time to look at Miami office space for rent in a different way.
#1 – Life Science, Data Warehouses, and Increased Demand for Office Space
In order to understand this segment of Miami’s commercial real estate market, it’s a wise idea to start with where the demand is coming from in the first place. The office space market is driven by the need to collaborate in person.
Given the rising demand generated by the pandemic, it makes sense that life sciences are continuing to take off.
But aside from the heavy laboratories and research facilities, office space is still required within the life sciences industry.
Office Space as a Home for Niche Industries
According to real estate news, life sciences commercial real estate demand is expected to rise by 10% this year.
It isn’t just the rise of life sciences, either: data storage needs are also on the rise, and the warehouse model doesn’t work for every industry.
Office space is flexible and can store a bunch of servers just as easily as it can host a sea of cubicles.
#2 – Big Developments Set the Stage for Miami’s Office Future
To stand on the shoulders of giants is truly a blessing within the greater commercial real estate space. Large developers are taking on incredible risks in order to bring something fresh and creative.
An ambitious project that deserves your attention is the development of the Crosby, a 33-story skyscraper that will have 450 units and stand 1,049 tall when everything is said and done.
The Crosby Skyscraper
It’s a joint venture between Nitin Motwani of Merrimac Ventures and Nick Perez of the Related Group, two well known figures in large-scale real estate development projects.
Office space is expected along with the condo units, making it a classic case of blending interests together to create a space that is second to none.
Luxury is the name of the game for the Crosby, but with a surprising twist: there will be zero rental restrictions on the property. This is shocking when many condo projects do put rental restrictions barring condo owners from being able to do short-term rentals.
Short Term Rental Restrictions are Growing in Popularity
Miami-Dade County has published its guidelines for short-term rentals, but are they the only place cracking down on short term rentals?
Not at all. Airbnb lists rental restrictions in their Help Center for Florida, but other states are beginning to take a closer look at short term vacation rentals as well.
Why? In a word: congestion. Short term renters often have a negative reputation due to loud parties, crowds, and additional traffic within a neighborhood.
For people that are buying property for peace of mind and quiet, this can be quite unpleasant.
#3 – More Development Projects in Miami
Another development project that’s both mixed-use and interesting is the collaboration between Major Food Group and JDS Development group.
The building, simply called Major at this point, will go up 1,049 feet in the air. Details are limited, but FAA approval documents are already in the works.
It’s classified as a supertall given the height, and the focus is on Miami’s financial district. In terms of potential office space, it’s a brilliant location.
The building is still under review, but the plan is to have an 82-story tower on the northwest corner of Brickell and SE 10th street.
While there is currently a 7-story building there, that’s nothing for a large-scale developer to demolish and put a supertall skyscraper in its place.
#4 – High Demand Meets High Acquisition Prices
The demand for development land is driving real estate prices up, a profitable trend for others in the office space locally.
In June of last year, a site zoned for a 2 million square foot mixed-use development sold for $46 million. The kicker? The total site is 2.2 acres! Yet it isn’t the size, but the opportunity to build another skyscraper in an ideal location.
The development site is close to the I-95 ramp, and near other lucrative locations like the Brickell CityCentre development site.
#5 – The Takeaways: Luxury, Flexibility, and Location
Ultimately, the biggest takeaways from studying Miami’s booming office space sector are fairly straightforward:
- Luxury is an important driver, even in the office space sector. Quality materials, open formats, and high-end finishes reign supreme.
- Flexibility is also important; mixed-use development seems to rule the day even when the focus could be exclusively office.
- Strong overlap exists between office spaces and condo projects that include conference centers and private office space.
- Although employees are going back to work, it looks like it’s possible for coworking opportunities to become part of Miami’s business environment. This would be a happy compromise.
- Location plays a role, and other development projects feed into what’s already taking place, further increasing demand.
The fear of missing out is strong, but it looks like Miami’s office space sector is only going to continue to grow.
As many working professionals look at how to have better work-life balance, it becomes clear that perhaps the best solution forward is a merging of cultures, rather than the strict separation between work and play that Miami had in the past.
If any city can pull off the rush of merging office space, recreation space, and premium living, it’s certainly the city of Miami.
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