Downtown Miami’s office market is diversifying: That’s good news for our local economy

By Danet Linares
January 25, 2019

Miami’s pursuit of Amazon thrust our region’s technology sector to the forefront, but new data from the Miami Downtown Development Authority indicate that tech companies have been eyeing our urban core as a viable home base for years.

The DDA’s newly released office sector survey, which tracked market activity over the past five years, found that 72 percent of all new-to-market technology firms coming to Greater Miami are settling in Downtown.

This metric is just one example of how our region’s largest office market is becoming more diverse as new industries set their sights on our city, lured by favorable demographics, an improved transit system, a variety of housing options, and significant cost advantages compared to other gateway cities.

Our Downtown office market comprises more than 22 million square feet of rentable space, amounting to Florida’s most significant employment hub and one of its primary economic engines. All told, over 250,000 people spend their weekdays in our urban core — more than ever before.

A quick survey of the market’s tenant list is a “who’s who” of the business world, with brands like Royal Caribbean, JP Morgan Chase, HIG Capital, Fortress Investment Group, Mastercard, Facebook and Porsche calling Downtown Miami home.

The Downtown office market has historically been dominated by a handful of sectors, most notably law and professional services, real estate, and banking and finance. In fact, Downtown is home to the highest concentration of financial institutions in the United States outside of New York, including 60 international banks, 100 alternate investment firms, and regional headquarters for four of the world’s largest accounting firms.

While these industries still occupy most of the space in Downtown, the DDA study found that our tenant base is becoming more varied. Notably, the past few years have seen an uptick in the number of tech, hospitality and media companies leasing space. Together, these three sectors have accounted for 38 percent of all new-to-market leases signed since 2013.

Recent examples of tenants that have relocated to Downtown from out-of-town or from other markets in South Florida include the CONCACAF soccer association, Cisneros, Google, Uber, Viacom/MTV, and I-Squared Capital. Two of the country’s largest operators of co-working space — WeWork and Regus — are also expanding in our Downtown.

Given Downtown Miami’s evolution from a 9-to-5 business district into a thriving 24/7 residential and commercial neighborhood over the past decade, these dynamics shouldn’t come as a surprise. For the first time, our urban core offers companies and their employees a walkable district that is densely populated and home to a range of housing, dining and entertainment options.

These factors are becoming more important as employees gravitate toward job opportunities in close proximity to their home.

A series of improvements in the urban core — from new transportation options and public parks, to the debut of cultural outlets and improved pedestrian access — have coincided with stability in the office market. Average occupancy levels, rental rates and tenant renewal rates are at their highest points in years, driven by pricing that remains well below that of places like New York, Washington, D.C., and San Francisco.

There’s reason for continued optimism.

The launch of Virgin Trains’ service into Downtown in 2018, coupled with the planned connection to Tri-Rail this year, will make commuting from points north even easier while significantly broadening our workforce.

Few downtowns in the country can compete when it comes to location. From an accessibility standpoint, office users are placing immense value on the fact that our Downtown is right off I-95, minutes away Miami Beach and Miami International Airport, and adjacent to PortMiami.

The advent of new arts and culture venues within the past decade has greatly enhanced quality of life in Downtown, with the Adrienne Arsht Center, Pérez Art Museum Miami, Frost Science Museum, and ArtMiami earning high praise among companies surveying the market.

Likewise, mixed-use developments such as Brickell City Centre, MiamiCentral and Miami Worldcenter are enhancing Downtown’s stature as a shopping, dining and entertainment destination.

The next chapter in Downtown Miami’s story will be centered on sustaining commercial and residential growth through investments in mobility, walkability and education, ensuring Downtown remains a desirable place to live and work. Projects like The Underline, the Downtown Baywalk and the renovation of Flagler Street will be welcomed additions.

As Miami’s urban core strengthens its appeal as a vibrant neighborhood that is home to a growing number of companies and residents, our Downtown office market is becoming more diverse. The result is a healthier, more resilient local economy.


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Downtown Miami: No Longer 9 to 5

By David Wilkening
December 28, 2018

Perhaps it is not surprising the area’s office market is changing but it may be news to some that downtown’s population now of 250,000 has helped it evolve from a daytime business market into a 24-hour live-work-play city.

This shift has led to major transit improvements (including the launch of high-speed rail and a free trolley service); the rise of the neighborhood’s bar and restaurant scene; and billions of dollars in new mixed-used development.

So says Miami DDA (Downtown Development Authority) in their study on office leasing trends in the past five years.

“Downtown Miami has long been a preferred location for multinational companies seeking access to North America, South America and Europe, and we’re increasingly seeing domestic firms enter the market as we improve our urban infrastructure, welcome new residential options, and cultivate a strong entertainment and hospitality scene,” explains Miami DDA Board Member Danet Linares.

Also Vice Chairman of Blanca Commercial Real Estate Inc., she adds: “Our downtown neighborhood is now viewed as a true live, work, play district and the result is an office market that has stabilized and is becoming more diverse.”

Some key study findings

• More than 6.3 million square feet of office space was leased in Downtown Miami since 2013, with finance, banking, law and real estate tenants accounting for over 60 percent of all lease activity.

• Tech firms are catching up. Altogether, 72 percent of the new-to-market tech and innovation firms leasing space in Greater Miami are selecting the urban core.

• Approximately 58 percent of companies entering the Miami market for the first time choose to locate downtown, “drawn by the neighborhood’s strong quality of life component, walkability and transit connections,” the study says.

• Tenant renewals are driving leasing activity, with 89% of downtown users staying in place and/or expanding their office when faced with an expiring lease. “This stability has fueled the rapid growth of downtown’s daytime population, which now exceeds 250,000 people,” the report says.

• Average rents for Class-A space have climbed nearly 15 percent since 2013 but remain affordable by comparison with other gateway cities in the U.S., such as New York, Boston, and San Francisco, according to the study.

• Downtown Miami has the highest concentration of banks and financial institutions outside of Manhattan.


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One Cocowalk signs co-working operator, Spaces, as anchor tenant

Blanca Commercial Real Estate, Florida’s leading independently owned commercial real estate brokerage firm, today announced its rehiring of David M. Valdez who rejoins the firm as a Senior Vice President and Chief Operations Director for the firm’s tenant advisory and brokerage services practice.