South Florida is a key beneficiary of economic expansion after the peak of the COVID-19 pandemic, which is creating a boom in the office market and a resurgence in office demand as employees prepare for a post-pandemic world.
Leasing activity was 47% higher in the first three months of this year compared to the same period in 2020, according to Cushman & Wakefield’s Q1 2022 Florida Office Pandemic Performance report.
Chris Owen, Cushman & Wakefield’s director of research in Florida, said the acceleration of new-to-market tenants and expansions by existing tenants are big factors in the increased leasing activity.
“One of the main drivers is a reassessment of the labor pool that we have here,” said Owen.
Class A assets account for 64% of leasing in the state as tenants look for amenitized and well-located assets to attract employees.
“There’s going to be more competition for tenants in Class B space but, depending on the overall dynamics of the market as a whole, that may benefit some tenants who will migrate from high-demand, predominantly Class A markets like Miami,” said Owen. “We’ve seen tenants migrate from Brickell. They may switch over to a secondary submarket like Airport West or South Dade.”
Greg Martin, principal and managing director of Avison Young’s Fort Lauderdale and Boca Raton offices said he is not surprised about the leasing activity throughout South Florida.
“We continue to see the financial sector very active in all of South Florida. Tech companies are looking at all of our markets as well,” said Martin. “This has been very good for Miami as it matures beyond just a location for Latin American tenants, and we see so many various companies look to locate there and build a strong, diverse, international business community.”
For Martin, a change in the type of businesses coming to South Florida is something to watch out for.
“It’s hard to ignore the substantial increase in venture capital funding that is coming to South Florida from the crypto business to other emerging technology sectors,” he said. “This will continue to drive strong population and business growth in our community.”