Telecom Trend Downtown Slurping Up Available Offices
By Candice Ventra
Office vacancies in Miami’s central business district have declined considerably as professionals see a continuing increase in telecom tenants seeking downtown offices.
Vacancies in the central business district which includes downtown and the Brickell corridor declined significantly since the end of 1997, figures from commercial developer Terranova show. Office vacancy downtown at the end of ’97 was 16.5% and in Brickell 17.2%. Today, downtown’s vacancy rate is down to 12.68% while Brickell’s is only 5.9%.
David Garfinkle, a partner at IEA which owns New World Tower and the 200 Southeast First Building, among others said vacancy at the two downtown towers has decreased dramatically since IEA bought them and had them retrofitted for telecommunications tenants.
"Our buildings have a technology orientation," Mr. Garfinkle said. "Our vacancy has dropped dramatically because our marketing has been towards telecom companies."
When his company bought New World Tower in 1997, he said, it was less than 50% occupied. Now the building is at 97% occupancy, he said.
Mr. Garfinkle said the 200 SE First Building was at 30% occupancy when his company purchased it. Now, he said, it is more than 90% occupied.
A great deal of the increase in occupancy, Mr. Garfinkle said, has to do with telecommunications tenants taking residence there. Some of IEA’s telecom tenants include AT&T International Telephone, EPIK Communications, FPL Fibernet and Genuity.
"Miami is establishing itself as one of the telecom centers of the world," Mr. Garfinkle said. "The proof is in the pudding. Telecom tenants are absorbing the space out there."
William Holly, managing director of Insignia ESG which represents several telecommunications tenants in the central business district said his firm this year has helped move telecom firms into more than 200,000 square feet.
"Compared to three years ago, that is a tenfold increase in telecom tenants and the space they require," Mr. Holly said. "There have been no new office buildings in downtown for 15 years."
He said the Technology Center of the Americas, which will house a proposed Network Access Point Internet-relay station, is the only office building under construction in the central business district. The 700,000-square-foot, Terremark-developed structure at 50 NE Ninth St. is expected to be complete by spring 2001. Office market experts say the NAP will draw even more telecommunications tenants into the area.
Insignia, Mr. Holly said, is in the market to find office space for telecommunications companies ABR Infocom and Lightspeed Miami.
Brian Gale, managing director for Taylor & Mathis which leases office space at 701 Brickell, 777 Brickell and Museum Tower said without a doubt telecommunications tenants are taking over offices in the central business district.
"I think there is no question that the single largest industry that is absorbing space in the CBD is telecommunications tenants," Mr. Gale said. "Most of the fiber optic in the city is in the CBD."
He said his company recently signed a letter of intent for 32,000 square feet for a telecom company at 701 Brickell that he cannot announce until the deal is sealed. A request by a telecommunications firm for this much space is not uncommon, he said.
"The main reason they want to be in the CBD is because of all the fiber-optic loops currently located there," Mr. Gale said. "Also, they all want to be near each other."