Office leasing across Miami-Dade County increases, but it's primarily shifting
By Yudislaidy Fernandez
Though office demand is still weak, leasing volume rose in the third quarter, but most transactions involved local tenants moving to a new address, a new report shows.
Office leasing has increased each quarter this year, with banks and law firms making moves. This is a boost for Miami-Dade's office market, which was slow in 2009.
But new office buildings, coupled with fewer tenants coming into the market, are adding to vacancies, as existing tenants are signing most of the deals.
"Vacancies are around 20% in many submarkets," Richard Schuchts, senior vice president at Jones Lang LaSalle, told the Rotary Club of Coral Gables at the Westin Colonnade Hotel on Oct. 7. "We are not seeing a lot of new tenants to market, and that is something that we need. It's something that is important to Miami."
Among the third quarter's largest and most prominent leases is that of downtown Miami's JPMorgan Chase, which moving to 1450 Brickell, noted Jones Lang LaSalle in its third quarter office pulse report.
The banking giant is leaving One Biscayne Tower to move into 47,000 square feet at the newly-built 1450 Brickell, a 35-story tower opened this year.
Across the Miami River, competing Wells Fargo Center — the other new tower on the block — inked international law firm McDermott, Will & Emery, which is to hand its keys at the Miami Center downtown to move into 26,000 square feet at the nearby 47-story building, the report said.
Smaller office deals closed the past quarter in suburban office hubs.
For example, Brown & Brown Insurance signed a 22,400-square-foot lease at Miami Lakes' Parkside Corporate Center, moving from Governor's Square, a business park in the same city.
In Coconut Grove, trial law firm Weinberg Wheeler Hudgins Gunn & Dial expanded from 6,700 to 14,000 square feet at the 21-story SBS Tower.
But the law firm is one of few expanding, as some larger tenants are actually returning space to landlords, who have no choice but to be accommodating to their tenants' needs.
"Larger businesses are giving back space they didn't need. They thought they were going to grow," Mr. Schuchts said. "But in this market, you don't have to hold that space because the landlord is holding it for you."
Big-name tenants shopping for space — who could sign deals this quarter — are Univision and the US Securities and Exchange Commission, according to the Jones Lang report.
Spanish-language media player Univision, which is headquartered in New York but has most of its production facilities and operations in Doral, is looking for 100,000 square feet in the Miami Airport area.
The federal agency now leases 50,000 square feet, but is touring for up to 80,000 square feet.
But the fourth quarter is already off to a strong start, following announcement of the largest office deal in Miami-Dade this year.
Amadeus, a leading technology provider to the travel industry, leased about 105,000 square feet at the 11-story One Park Square in Doral, a new office building that New Boston Fund acquired this month.
Over in Miami's Health District, the now-rising University of Miami Life Science & Technology Park signed its first new-to-market tenant, Daya Medicals, which is to take 15,000 square feet.
The Palm Beach-based medical device company joins the University of Miami, the first signed tenant that is to occupy 80,000 square feet in the technology park's first building, a 252,000-square-foot facility.