High-end execs, young workers spur Miami Beach offices
HIGH-END EXECS, YOUNG WORKERS SPUR MIAMI BEACH OFFICES.
Miami Today discusses the latest Miami Beach office market trends with Lee & Associates South Florida's Multifamily Specialist, Matthew Katzen.
November 9, 2022
By Abraham Galvan
A young employment base, high-net-worth executives and boutique-size companies are driving the office space market in Miami Beach, according to local real estate experts.
Hedge funds, tech companies, real estate companies and private equity firms are relocating or opening satellite offices in Miami Beach, which is keeping the city’s office space market demand high, said Matthew Katzen, senior vice president for Lee & Associates South Florida.
"A large number of companies in South Beach are just expanding because their employee base loves it," he said. "A lot of these employees live in the area and enjoy the work, live and play concept, all within walking distance."
High-net-worth individuals who are planning to open offices and move their businesses to Miami Beach are trending as well, said Andrew Easton of the Easton Group. "And that is because a lot of CEOs and Executives ended up purchasing homes there."
"Even though office space inventory remains low, there are some newer building, like Eighteen Sunset in Sunset Harbor," he said, "that is going to attract high rental rates and they're all going to be smaller boutique buildings, which I think will continue to have high demand."
During this years third-quarter, Miami Beach recorded the second highest asking rate increase in Miami, fueled by Eighteen Sunset, with rates north of $120 per square foot, according to a JLL insight report.
With asking rates averaging almost $70 per square foot, Miami Beach has the third highest rents behind Wynwood and Brickell and holds the third lowest vacancy rate in the market at 12.7%, the report said.
Driven by company executives who moved down during the pandemic, the Miami Beach boutique office space will continue to be particularly strong moving into the new year, said Evan Rosenberg, a partner for Berger Singerman.
"C-suite personnel now desire an office footprint and I think remote work is largely coming to an end," he said. "A lot of these people and members of companies are seeking boutiques office space that is to be occupied by seven to 15 employees. They don't want to drive to Brickell or downtown. They want to drive five to 10 minutes to their office, maintaining that flexible lifestyle that Miami Beach offers."