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Tech Tenants, Other Startups Priced Out of Prime Locations

MIAMI-As the office market tightens and some dot.coms fold, landlords are becoming more selective, asking for longer-term leases, larger security deposits and even letters of credit.

By Harold Kelman | Updated on August 22, 2000

Dot-coms are typical of the tenants finding it almost impossible to locate on prestigious Brickell Avenue or in tony South Beach. Even if they are willing to pay asking rents of $30 psf or more, property managers may be leery of leasing to them.

“Owners can be more conservative because the office market is so tight,” David B. Voell, a senior director in Cushman & Wakefield’s local office, tells GlobeSt.com. They became especially cautious after tech stocks hit the skids last spring.

Prospective renters may now be asked to sign longer-term leases, as well as put down bigger security deposits and even letters of credit as proof they can fulfill their lease obligations. Building managements are especially picky if they have to spend $25-$30 psf to get space ready for occupancy, says Voell. Tenants have a better chance of making a deal if they can use existing office layouts.

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