MIAMI-Whether you see it as a flight to quality or just an opportunistic tenant’s market, relocations are the name of the office game. Indeed, the Miami office relocation trend has fueled nearly 80,000 sf of recent transactions for CresaPartners alone.
Of the 82,211 sf of office leases CresaPartners has brokered in the last few quarters, 76,672 of them are attributed to relocations. The remaining 2,539 sf is associated with the entrance of an international company expanding into the United States via Miami.
“From free rent to tenant improvements, there are plenty of concessions still to be had in the marketplace,” Barbara Liberatore Black, founding principal of CresaPartners, tells GlobeSt.com. “Overall, deals to move typically are beneficial to the tenants.”
Despite an improving South Florida economy, there’s a glut of office space—and high vacancy rates remain the norm in many buildings. It’s still a tenant’s market—and tenants are maximizing the opportunity to lock in long-term leases with plenty of incentives at the front end. The “tenant’s market” story is not a new one, but it’s the reality. With an additional 600,000 sf of office space expected to come online later this year at 600 Brickell, that storyline should continue.
Some of CresaPartners latest transactions include Berger Singerman, which signed a new lease at 1450 Brickell Avenue for 25,837 sf. The firm relocated from another building in Downtown Miami. Morgan Stanley signed a new lease at 201 South Biscayne Boulevard for 19,104 sf, relocating from Brickell. Apex USA signed a new lease at 201 South Biscayne Boulevard for 10,683 sf, relocating from West Dade. RSM McGladrey has signed a new lease at 801 Brickell for 7,702 sf, relocating from Coral Gables. And the list goes on and on.
With each lease, Black says her firm leveraged market conditions—and with each lease the tenant was offered value-adds, from lease terms to location to amenities. In the quarters ahead, she expects to see more relocations, especially in the banking, legal and finance sectors in the Miami market.
“Landlords are picking up the overall tenant improvements and in some cases moving and furniture costs,” Black says. “When landlords start reducing concessions, you are not going to see as many tenants relocating. Renewals will take over. But I don’t see anything changing in the short-term. I think it will be about two years before we’ll start to see the concessions go away.”
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