A flood of new office product in Miami and a slowing local economy will combine to start driving down rents in South Florida\u2019s central business districts, predicts CresaPartners principal Charles Barton. \u2018This one is an easy call,\u201d Barton told CPN. Central business district office markets in Miami, West Palm Beach and Fort Lauderdale are feeling the pinch of the housing market crisis, as the mortgage industry and related businesses industries cut personnel and space. That trend compounds one that has already been unfolding for several years; commercial banks\u2019 decisions to reduce space and move some back-office operations to South Florida suburbs have already taken a bite out of the CBD office market, Barton explained. One bright spot for the area\u2019s office market continues to be the legal sector. Unlike other large office users, law firms are not shedding or subleasing space. \u201cThey need to be proactive before their leases expires,\u201d Barton said. \u201cThe average large user can\u2019t afford to make large commitments based on a short term-downturn.\u201d Law firms have accounted for several of South Florida\u2019s biggest leases of the year. As reported last month by CPN, Greenberg Traurig plans a fall 2010 move to 150,000 square feet at Met 2, a 750,000-square-foot office tower under construction in Miami. The project will be part of Metropolitan Miami, a $1 billion mixed-use project being developed by MDM Development Group and MetLife. But given the state of the economy, even such large leases as Greenberg Traurig\u2019s are unlikely to offset the massive amount of new office space that three spec projects will bring to Miami. Also adding to the region\u2019s inventory in the next couple of years will be Foram Group\u2019s 1.5 million-square-foot Brickell Financial Centre and Rilea Group\u2019s 585,000-square-foot 1450 Brickell. As a result of these trends, rents will stay stable into 2009 and start to dip as the new space comes on line. Average Class A rents in the central business district ticked up to $40.20 per square foot during the second quarter from $39.66 in the first quarter, according to CresaPartners. Average Class B rents remained virtually unchanged: $27.93 per square foot in the first quarter and $29.89 per square foot in the second. South Florida\u2019s suburban office submarkets have reason to fare somewhat better in 2009 and 2010, Barton argues. Bolstered by the strong and growing presence of international banks and other firms based outside the United States, the suburbs enjoy somewhat more diverse economies than the central business districts. Class A suburban office rates in Miami-Dade, Broward and West Palm Beach counties increased nearly $1 per square foot during the first half of the year, rising from $31.79 in the first quarter to $32.74 per square foot in the second quarter.<\/p>\n","protected":false},"excerpt":{"rendered":"
A flood of new office product in Miami and a slowing local economy will combine to start driving down rents in South Florida\u2019s central business districts, predicts CresaPartners principal Charles Barton. \u2018This one is an easy call,\u201d Barton told CPN. Central business district office markets in Miami, West Palm Beach and Fort Lauderdale are feeling…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003834669","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n