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Discussion Starter · #1 ·
Tightening office space to benefit landlords
Susan Stabley
Fort Lauderdale's office market leapfrogged 10 spots to No. 1 in Marcus & Millichap's 2005 National Office Index, displacing Washington, D.C.

Miami ranked seventh, up seven places, while West Palm Beach moved up two slots to 10th place.

The limited amount of new office construction helped propel all three South Florida markets into Marcus & Millichap's top 10.

Fort Lauderdale rose above areas like Orange County and Manhattan and had the second highest forecast revenue growth of all 42 markets considered.

Net absorption of office space in Fort Lauderdale should hit its highest level since 2000 this year, according to the annual report, and more than 9,000 jobs that require offices are expected to be created.

Job growth also pushed the West Palm Beach market into the top 10, with about 6,300 positions in the office sector predicted. In Miami, 8,000 new office jobs have been forecast.

Already, South Florida's tightening office market has tilted the advantage to landlords.

"I think we have a situation in Miami we have not had in quite some time," said Tere Blanca, Cushman & Wakefield's senior managing director and branch manager for South Florida. "Short of any major event or financial market crisis, it's going to be, very soon, a very favorable landlord market."

Rents will likely increase by 50 cents a square foot across the board in Miami's central business district and as much as $1 a square foot in Coral Gables, where the office market is "very tight," she said.

Any concessions that still exist will evaporate and companies who require larger spaces will likely push out smaller tenants, she said.

"All these towers will have to juggle," said Blanca, who added that smaller tenants without renewal options in place might have a hard time securing a spot.


Blanca said to expect a developer to propose a spec building soon.

"We're at the doorstep of another real estate boom," said Greg Katz, executive VP for Fort Lauderdale-based Studley, a national commercial real estate firm specializing in tenant representation. "The condo market has to be saturated."

The skyline in urban areas across the three South Florida counties has been littered with cranes working on mostly residential and mixed-used development. Properties once marked for offices have been used for condos, keeping supply low.

And while it has helped South Florida take three places in Marcus & Millichap's office report, it may also make it very hard for developers to launch office towers in downtown areas.

Consider: Miami-based Rilea Group plans to build a 32-story, 500,000-square-foot office building at 1450 Brickell Ave., but it won't be ready until 2008. No office towers are under construction in the city's financial corridor or in downtown.

Rilea Group President and CEO Alan Ojeda said the only reason he's able to build office is because he locked in a contract before construction costs skyrocketed and closed on the land for about $95 a square foot. Today, land prices in the Brickell area have quintupled.

"I bought cheap," he said. "It is very difficult to pay $500 a square foot and be able to build an office building. What kind of rents would I have to charge?"

E-mail Miami-Dade real estate writer Susan Stabley at [email protected].
 

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Discussion Starter · #2 ·
It looks like South Florida's rapid downtown condo growth is making our downtowns too expensive for office buildings to be built. Office developers can't make a profit because condo towers have made land values downtown skyrocket.

Does this mean all of our new office space will be built in boring suburban office parks?

Yuk! :puke:
 

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what it means is that a developer is going to have to build twice as tall and twice as big to make up the difference in what he get for his money a 30 storie office building in downtown miami will not be feasable it would have to be 50 or better to make a profit and at 50 stories that office building would be in the 700ft range...

also building mixed use office and residential and commercial space is the other way to go....

our next wave of great towers will be office space and not so much residential
what is going to happen is that the miami arena area will become an office building hub and a few more residential towers.

you will also start to see more smaller village type buildings in other areas like coralway and gables dadeland and biscayne blvd north. but dont expect there to be much more condo units towers coming online after this wave until after the office wave hits us then you will see a big wave of residential...
 

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and so the cycle continues
 
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I hope this means an office boom. It's the perfect time right now to build with low interest rates and a small office market needing more space. It sounds like 1979 all over again with high gas prices and businesses in the Miami region demanding more office space.
 

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Im not worried about higher prices. If people can't build an office building because it is too expensive, then while office supply runs out, supply increases. THE FACT THAT PEOPLE CAN'T BUILD OFFICE BUILDINGS RIGHT NOW BECAUSE ITS TOO EXPENSIVE YET DEMAND IS RISING IS A VERY VERY GOOD THING. Sooner or later profits will be worthwhile, and with the high price tag on land two things will happen Class A office buildings will have to be built,and those buildings will have to be taller to hold more people, and therefore make a proft.

Ladies and gentlemen, this is how booms begin. I can smell the steel, the glass and the massive buildings that are now on the verge of appearing.

Soon Miami will have the skyline that truly exudes the greatness of the city.

No one must look down on this news, this is the single best piece of news on the status of the commercial market in Miamii have ever heard!!
 

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Discussion Starter · #7 ·
okay, i'm glad it is good news. Hopefully Miami will have a 800+ foot tower soon!

Will downtown Fort Lauderdale's proximity to its airport keep lauderdale's towers below 600 feet?

Really, all three of SoFla's major CBDs are really close to major airports.

Anyway, let's hope an office boom will start soon.
We're going to have some kick ass skylines down here!!
 
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