Across the country, office markets are tightening, driving higher rents, generating developer interest to build new office space and investor demand to acquire more office assets. In tighter markets, change is swift and impactful. This is just one of the reasons JLL is presenting the new skyline report as an interactive digital platform. For the first time, the popular JLL Skyline report on Class A and Trophy office towers can be quickly compared across 47 markets in North America.
Shared trends among markets show that while the Central Business Districts (CBDs) and Downtown areas of the cities remain at the top of tenants’ choices of office space, a growing demand for unique offices and urbanized neighborhoods indicates office space preferences are changing, influenced in part by a growing millennial workforce.
Miami’s Urban Core Seeing Rents and New Buildings Rising
The volume of foreign capital chasing Miami Skyline office deals continues to grow and is having an upward impact on rent prices. A growing segment of tenants are turning away from Skyline buildings in favor of non-core Class A and Class B buildings, inside and outside of the CBD. The new projects, Brickell City Centre Green and Two Brickell City Centre, currently under construction are expected to deliver by 2016, highlighting continuous strong demand for companies to be in the urban core despite higher pricing.
New Construction in the Horizon for Fort Lauderdale
Taking a protagonist role is the Downtown Fort Lauderdale Skyline. With investment flowing into the market, five buildings have traded in recent quarters, three of which are trophy assets, totaling $522 million.
Tenants who signed short-term leases at a discount during the recession are experiencing sticker shock as their terms are set to expire, causing smaller tenants to seek more cost effective options in the suburbs. With only three spaces available larger than 30,000 square feet and rents continuing to rise, talk of new construction along Broward Boulevard is creating buzz in the local office market.
More Trophy Trades in West Palm Beach
Investment activity is also flowing into Downtown West Palm Beach with more assets trading, Skyline shows. When Phillips Point sells for the projected price of $540 per square foot, then the entire trophy set of buildings will have traded hands in the last 18 months – that will make big news!
The most recent trade being the iconic CityPlace Tower that sold for $507 per square foot. In Downtown West Palm Beach, low vacancies – as low as 14.9% and 8.9% for the Skyline’s set of trophy towers – is an attractive factor for institutional investors that will keep this market on their radars.
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