Miami-Dade county has been a persistent drawing point in the corporate allure of Southern Florida. The "Magic City" commercial real estate market is booming, with millions of square feet in CRE developments under construction and is only set to grow bigger.
So read on to learn about the existing and recent developments taking place. Staying on top of the emerging CRE hotspots is critical knowledge for any business considering how their location shapes their overall culture and spending.
Corporate Relocations to Miami, Florida
Florida has been in the commercial spotlight for several years. As a top state for relocations, people and businesses alike were lured in by the affordable cost of living and quality of life. However, what wasn't predicted is how consistent the interest in Southern Florida turned out to be. Despite the investment of over 300 financial services firms who moved to Florida, the corporate migration South was still thought to be a fad.
Well, at what point does it move away from "fad" classification and earn the status of a strong CRE market? Because according to the Wall Street Journal, financial firms that have opened offices in Miami over the past 18 months represent around $2 trillion in assets.
Miami-Dade county is now an irrefutable force.
The influx was only got stronger when investment behemoth Blackstone signed a long-term 41,000 square foot lease in downtown Miami. Since then, it has been one company after another, including Citadel, whose CEO Ken Griffin, announced the company was "all-in" on expanding their footprint in the city.
Not only this, but it's poised to now reap the rewards from existing relocations and get bigger. The Beacon Council, the county’s economic development agency, estimated that the area will benefit from $800 million in recurring economic gains. As it expands further, the relocations will create nearly 10,000 new six figure jobs.
If you’re looking for office space in Miami (or anywhere else for that matter), you’ll want to be prepared for the property search. Check out our free course on how to find the optimal office space.
Part of Miami's explosive growth is due to skillful marketing on behalf of the county. The Follow the Sun Campaign, started in October of 2020 incentivized business relocations via annual payments of up to $50,000.
Numbers appearing on the Following the Sun Campaign
- 100,000 Residents
- $38 Billion Economic Impact
- $75 Billion in Assets Under Management
- 0% State and Local Income and Capital Gains Tax
According to Propmodo "Miami’s mayor has been selling his city as a business-friendly utopia that has all the benefits of a big city without the higher taxes, crime, and regulation that he believes other major cities are struggling with."
Mayor Suarez touted the city's budget surplus of $145 million, low unemployment, and lowest homicide rate since the 1930s as points to draw in corporations tired of big, dangerous and expensive cities.
But whatever they're doing it's working. Suarez has proved he can speak the language of Corporate America.
Almost half (45%) of the new leases signed in the city are from tenants new to the market, according to a report from the Miami Downtown Development Authority. Because of this climbing interest, Propmodo reported that "office asking rents in Miami-Dade spiked 13 percent year-over-year in the third quarter, driven mainly by out-of-town firms moving there."
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Miami is Sustaining Demand
Miami is not risking being outpaced by its own successes. The city is continuously voting on new development projects for office, retail, and residential real estate. According to the Real Deal, "The city still is poised to get 10 projects with more than 655,000 square feet of offices on sites."
This comes on top of the 1.6 million square feet of office space already under construction in Miami, as of 2022's Q3.
Here are some other Miami stats from Q3 2022
Data source: Avison Young Q3 Miami Office Market Report
While the rent rates in Miami are slightly higher than in the rest of Florida and the Southern Belt of the US, they remain reasonable. For example, in one of Miami Beach's tallest properties, 407 Lincoln Road, office space in the tower is listed for $34 to $38 per square foot.
Now for context, compare this to the rates of one of Manhattan's tallest buildings, 1 Vanderbilt, which lists space for $312 per square foot. We are talking a 100% markup. Now, doesn't it make sense why so many ex-New York companies (specifically financial firms) are moving South to Miami? For the same level of prestige, you're saving millions over a year by being in Southern Florida- and not to mention that your new office will probably be walking distance to the beach.
The Miami Office War
Miami is a hot spot which means that the pressure is on commercial landlords to get more competitive. Standard office furnishings no longer cut it.
According to Global Newswire, "Miami has achieved an incredible level of sophistication, but, when looking at the market, we found that many buildings are failing to cater to tenant needs. Companies are bringing employees back to the office and need enticing spaces and accessible locations.”
This also bleeds into the push for property owners to deliver their spaces in more move-in ready conditions. Since so many new Miami leases are due to relocations, the companies moving are not looking to invest considerable time commitments for extensive buildouts. This is especially true since they are not from the original area. They are looking for seamless relocations, done as efficiently as possible.
The impetus on premium building features means that corporate tenants have the power to be more competitive during negotiations. Even though Miami is a hot spot for corporate relocation, property owners are still being nudged to offer more incentives, terms, and better prices for credit-worthy tenants.
Relocate to Miami with a Tenant Rep
This means that, if you’re relocating, you can maximize the value of your tenancy to the highest degree. But don’t risk losing the opportunity by doing it alone. As experts in negotiation, the true Tenant Reps at iOptimize Realty® have 30+ years of experience going head-to-head with commercial property owners. We have seen it all and make a business of leveraging your tenancy against the competition.
So, if you’re relocating to Miami, you can do so with the lowest net cost. For instance, since there is such pressure for move-in-ready sites, you can get a space that requires renovation for a fraction of the cost. Then, negate the price of construction with a generous tenant improvement allowance. The key here is to work with a professional who knows how many options you have and weighs them against each other for the optimal solution.
If you’re ready to fly south, make sure you’re doing it right. Take full advantage of a booming market today with a true Tenant Rep.
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