Miami Beach Now Leads South Florida Office Rent Growth
Miami has become one of the nation’s largest fintech hubs, an increase that has accelerated as the COVID-19 pandemic drove businesses en masse to the metro area. That’s pushing up office rents across the board in Miami-Dade County – and among the region’s competitive submarkets, Miami Beach has shown the fastest growth after the pandemic.
Rents charged for Class A office space in Miami Beach rebounded to $ 56.66 per square foot, up 10.2% year-on-year, according to a new report from Colliers. The submarket is also heavily constrained in terms of supply, especially with regard to viable office space. Most investors, wary of high land prices, turned to luxury hotels or boutique condo projects instead, but these same factors also kept demand booming.
In nearby Brickell, which Colliers calls “the Manhattan of the South,” the Class A market continued to recover during the first quarter, thanks in large part to relocations of businesses from the Northeast and Midwest. . Average rents reached $ 66.70 per square foot in the first quarter, an increase of 4.9% from the first quarter 2020 figures. The region is a major hub for South Florida’s fintech industry and other professional service providers: Thoma Bravo recently signed a 36,500 square foot lease at 830 Brickell, and existing tenants like Banco Sabadell and HIG Capital also renewed their leases during the quarter, signaling optimism for “a very strong year 2021”, according to Colliers.
And in downtown Miami, home to a sizable roster of law firms, banks, and public sector employers, fares are the lowest among metro submarkets at $ 50.35 per foot. square. This is an increase of 8.2% compared to the first quarter of 2020.
Meanwhile, further afield, the suburb of Coconut Grove has also benefited from the disruption of the COVID migration pattern with tenants like Mercy Hospital, the John S. & James L. Knight Foundation and Weinberg Wheeler Hudgins Gunn & Dial all renewing existing office leases. Gross rental rates for Class A space in the market rose 7.9% year-on-year to $ 60.34 per square foot last quarter.
that of Miami Wynwood neighborhood also attracts tenants using office space both inside Miami and out of state. Recent transplants include Spotify, Live Nation Entertainment Co., Bank OZK, the venture capital and start-up company Atomic, led by Jack Abraham, and Founders Fund, the multibillion-dollar venture capital firm led by the co-founder of PayPal , Peter Thiel.