Real Estate Florida - May/June 2009

Vacancy rates for the Downtown and Brickell submarkets—which collectively make up the Miami CBD—are 11.2% overall through the first quarter, with average asking rents well below their customary levels of $40 per square foot, according to CB Richard Ellis. The overall Miami-Dade County vacancy rate is 11.4%, up nearly three percentage points over the past year, yet still better than other large metro areas across the state.

Local brokers say Miami still has a distinct advantage over all other Florida cities that hasn’t changed through the national downturn: The city remains the US gateway to Latin America, and now the price of admission isn’t considered nearly as steep.

“We have become more affordable for office and residential, and that works in our favor,” says Tere Blanca, president and CEO of Blanca Commercial Real Estate and current chair of Miami’s Beacon Council economic development group. She notes that Miami is seeing tremendous renewed activity from South American companies looking to put headquarters there.

Blanca, a former Cushman & Wakefield executive whose new independent firm recently won the leasing assignment for the 35-story 1450 Brickell office tower now under construction, points out that no more new space is likely to come along for years after current buildings are completed because of continuing credit restrictions. She adds that the upcoming excess will likely be absorbed as suburban office tenants reconsider the city center: “There might be a migration toward quality.”

Other brokers agree with Blanca, pointing out that the new space downtown amounts to less than 5% of Miami-Dade’s current office inventory of 46 million square feet. They note that suburban markets, such as Coral Gables and Miami Beach, are still faring well.

“It will get filled up,” says Tom Capocefalo, managing director with Studley in Miami. “It might take a number of years, but it’s not going to diminish the city’s prestige.”

the Miami Downtown Development Authority and other similar groups to launch a new initiative, branded “Where Worlds Meet,” that aims to promote Miami-Dade as a solid place to work, live and vacation. The campaign is being geared toward Latin America and Europe, the region’s strongest foreign markets.

“We are transitioning to a 24/7 city,” says Alyce Robertson, MDDA executive

director. “Not only can you do business here, but on weekends you can play.”

Other companies appear to be demonstrating their confidence in the market by staying put. For example, UBS Financial Services signed a five-year extension for 34,536 square feet in Bank of America Tower at International Place, where it has been a tenant for the past 15 years. “Businesses recognize the value of having a long-term pres-