Offices lure tenants with Latin America connection
By Scott Blake
With about 1.5 million square feet of vacant office space in Miami just from properties built since 2008, depressed lease rates and Miami's locale as a business connection to Latin America continue to lure office tenants to the area's key submarkets of Brickell, downtown and Coral Gables, according to market watchers.
Asking rents have seen only marginal increases in those markets from what they were five years ago, prior to the recession, according to office market research firm Studley's last quarterly report.
"Other companies are capitalizing on the opportunity to move to Brickell or Coral Gables while also leasing some of the highest-quality space the market has seen in years, and at terms that remain very favorable," the report states.
Robert Orban, Studley's senior vice president and co-branch manager in Miami, said another factor that has been luring some companies to Greater Miami's core has been South Florida's convenient location as a launching pad for businesses to access Latin American markets.
Mr. Orban said the trend can be cyclical.
"There's the ebb and flow of Latin American operations," he explained. "Some companies will move from Miami to Mexico City, then move back to Miami" as a base to reach Central and South America and the Caribbean.
"Brickell Avenue," he added, "is like the Wall Street for Latin America."
Mr. Orban said he doesn't see a clear-cut trend in the types of businesses moving to Miami from outside South Florida. Rather, some companies have moved to Miami from other locations in the region, such as Broward County.
"I don't see a lot of businesses coming to Miami. I've seen some shuffle around South Florida," he said.
"Some of them were just misplaced to begin with" in the region and later relocated to Miami, he added.
In the coveted Brickell and Coral Gables areas, financial firms, insurance firms, law firms and other professional services continue to lead the way.
Several leases were completed in recent months by companies opening their first offices in South Florida, including London-based insurer Catlin Insurance Co. Inc. and cyber security company Cipher at 1450 Brickell.
Reinsurance firm Swiss Re America Holding Corp., retailer Longchamp USA and private equity firm MDR Americana also signed leases at 1450 Brickell in recent months, the Studley report noted.
Also in that time frame, public relations firm Max Borges Agency signed a 10-year lease for a full floor at Brickell Bayview Centre.
In Coral Gables, a couple of financial sector tenants signed leases at 396 Alhambra Circle in the first quarter, including Banco Pinchincha. Also at 396 Alhambra, HBO Latin America completed a lease for 66,203 square feet of space — among the largest deals signed in Coral Gables in the past year, the report added.
Also in Coral Gables, the firm of Hinshaw & Culbertson LLP completed a new lease in recent months at 2525 Ponce De Leon Blvd.
Looking forward, ongoing market conditions could continue to draw tenants to Greater Miami's core office locales.
"Concessions may have peaked," the Studley report concluded, "but lease terms are expected to remain very favorable to tenants as the availability of new and renovated product in Coral Gables, Brickell and Downtown Miami continues to exert pressure on landlords to compete aggressively for tenants."
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