Cohen Brothers Realty Corporation of Florida(CBRC) has announced the development of West Palm Point, a new 2.4-acre development with a 400,000-square-foot Class A office tower and amenities in West Palm Beach.
The 26-story office tower will offer tenants a variety of amenities including a one-of-a-kind private landscaped rooftop park, 14,416 square feet of premier ground floor retail space, multiple fast-casual restaurants, a fitness center, conference rooms and unobstructed views of the intracoastal waterway and Atlantic Ocean.
Pelli Clarke & Partners and Nichols Brosch Wurst Wolf are the architects of record.
“Pelli Clarke & Partners, the internationally renowned design architecture firm behind West Palm Point, has designed another masterpiece that will be appreciated around the world,” said Charles S. Cohen.
CBRC has appointed CBRE as the exclusive office leasing agent. John Criddle, Joe Freitas and Max Pawk with CBRE will lead local marketing and leasing efforts in partnership with Marc Horowitz from Cohen Brothers in New York.
“Our team is fielding calls and scheduling meetings with local and national tenants who recognize the elevated level of quality and experience a Pelli Clarke & Partners building will bring to the West Palm Beach Central Business District,” said Criddle. “There is no doubt West Palm Point will be a world-class office destination serving one of the fastest-growing cities in the financial services and corporate sectors.”
The West Palm Point development will occupy a full city block at the intersection of Okeechobee Blvd. and Quadrille Blvd. in downtown West Palm Beach, including a Class A office tower and an adjacent parking structure.
The 10-story parking garage will have space for approximately 1,250 automobiles and 120 bicycles, as well as a rooftop gathering area with a café, shaded seating, paseo, and water feature. Additionally, there will be outdoor seating between the office building and parking structure to help support population growth of downtown.
Construction is anticipated to commence in the fourth quarter of 2023, with expected tenant occupancy beginning in the third quarter of 2026.
CBRC is one of the foremost private office real estate development and management corporations in the United States, led by award-winning developer Charles S. Cohen. CBRC owns and manages over 12 million square feet of prime office, design showroom, and retail properties in Manhattan and Westchester County, New York; West Hollywood, California; Houston, Texas; and Dania Beach.
00SFOBA STAFFhttps://dev.sfoba.com/wp-content/uploads/2026/08/SFOBA-logo-sharpened-transparent.pngSFOBA STAFF2023-07-16 21:42:442023-07-16 21:42:44Cohen Brothers Announces New 400,000 SF Class A Office Tower, Names CBRE Exclusive Leasing Agent
Gale Properties has appointed CBRE as the exclusive leasing agent for The Anthony Building, a historic five-story property in Downtown West Palm Beach.
Located at 312 Clematis St., the 25,000-square-foot property was originally constructed in 1925 as Anthony’s department store. Gale Properties acquired the property in 2016. Ownership plans to execute a capital improvement plan, including renovating the building’s exterior façade, installing a new elevator cab, and updating the common areas with new lighting and flooring.
“Now is the right time to invest in upgrading this iconic property. Clematis Street is experiencing an infusion of capital to transform the area into a high-end live-work-play area as evidenced by the addition of new residential options, Roxy’s announcement of its rooftop restaurant and pool addition, and the Anthony’s own Fitness Hub Studio recently named as one of the top twelve most beautiful gyms in the country,” said Gale Properties President Andrew Gale.
CBRE Senior Associate Max Pawk will lead leasing efforts on behalf of Gale Properties with spaces ranging from 500 square feet to 4,000 square feet of contiguous space available for lease.
“The Anthony Building has been a staple in the heart of Downtown West Palm Beach for many years. Ownership has already invested capital to create move-in ready suites, including some furnished options, and is looking to make further upgrades to meet the immediate needs of tenants looking for a smaller footprint in the market, such as CPAs, attorneys, or financial advisors,” said Pawk.
The property features four floors of office space with high ceilings and hardwood floors, set above ground floor retail.
Tenants have easy access to various restaurants and retail options, as well as nearby access to Palm Beach International and the Brightline train.
00SFOBA STAFFhttps://dev.sfoba.com/wp-content/uploads/2026/08/SFOBA-logo-sharpened-transparent.pngSFOBA STAFF2023-07-11 20:17:522023-07-11 20:17:52Gale Properties Appoints CBRE Exclusive Leasing Agent For West Palm Office Property
Avison Young’s Florida Capital Markets Group completed the $15,450,000 sale of Plantation Medical Office Park, a six-building, single-story medical office campus totaling 63,319 square feet at 6710-6834 West Sunrise Blvd. in South Florida’s Plantation submarket.
The $244-per-square-foot transaction underscores the attractiveness of medical office assets as overall office sale activity has slowed.
Avison Young Principals John K. Crotty, CCIM; David Duckworth; Michael T. Fay, who is also Managing Director of the firm’s Miami operations; and Brian C. de la Fé sold the asset on behalf of PPP Capital, LLC. The buyer was Bezrat H., Corp.
“Located in one of Broward County’s most desirable office submarkets, Plantation Medical Office Park is 98% occupied with a rent roll composed entirely of medical tenants, many of which have been there for decades and have expanded their operations and occupied additional space,” said Crotty. “The buyer will benefit from stable, long-term cash flow as the asset appreciates and the option to fulfill the property’s significant value-add potential through developing a vacant pad previously approved for a two-story 22,000-square-foot medical building.”
Plantation Medical Office Park is in a densely populated, major commerce and medical hub with over 200,000+ residents, 7,000+ businesses, and $2.3 billion in total consumer spending within a five-mile radius. With exceptional visibility from Sunrise Boulevard, the Park is strategically located just three miles from Westside Regional Medical Center, a full-service 250-bed hospital. Notable tenants include American Access Care, Dickens Sanomi Academy, and Baptist Hospital of Miami, Inc.
“Medical office is currently one of the most desirable property types among investors due to the stability of in-person doctor-patient care solidifying tenant need for physical space,” said Duckworth. “Marketing the attractiveness of medical office and the ideal location of this asset, in particular, allowed us to secure strong pricing despite market uncertainties in the financial markets.”
Avison Young insights show the latest banking crisis has led to more economic headwinds for investors, rendering it difficult to secure financing for commercial real estate transactions, particularly within the office sector. However, the greater need for physical space and high costs associated with relocations and build-outs among medical office tenants abate the concerns of investors and financiers alike and make medical assets the exception during challenging times.
00SFOBA STAFFhttps://dev.sfoba.com/wp-content/uploads/2026/08/SFOBA-logo-sharpened-transparent.pngSFOBA STAFF2023-07-03 14:05:592023-07-03 14:05:59Plantation Medical Office Park Trades
Cushman & Wakefield has arranged a new long-term lease totaling 12,149 square feet for Office Evolution and Venture X at the District Pointe office building in West Palm Beach.
Office Evolution and Venture X will lease the fifth floor and create a superior coworking space that offers a community of entrepreneurs, established businesses, and startups a flexible workspace and opportunities for professional collaborations.
Anthony Librizzi and Tara England of Cushman & Wakefield represented the landlord, District Pointe, LLC, in the lease negotiations. Derek Baker of Colliers represented the tenant.
“This transaction reflects the on-going trend of flexible office providers growing at a break-neck pace here in South Florida,” said Librizzi, Managing Director at Cushman & Wakefield. “The offerings provided by these flex space operators are meeting the demands of many small and start-up companies here in South Florida. And District Pointe, with its complete renovation of the interior and exterior of the building, is attracting significant interest from a number of industries in our market.”
Owner District Pointe, LLC is a joint venture between Verdex Construction and Index Investment Group that was formed to purchase the property in November 2021. As part of the acquisition, the building was rebranded as District Pointe and Verdex Construction announced plans to occupy a floor for their new U.S. headquarters.
“We welcome Office Evolution and Venture X to this building, that will be part of a larger redevelopment occurring around Centrepark Boulevard and Belvedere Road to create a great environment for live-work-play with additional apartments, restaurants, retail, and sports facilities being built,” added Bjarne Borg, CEO of Index Investment Group.
District Pointe is located at 1501 Belvedere Rd. and sits directly across from Palm Beach International Airport. Recently made available for multi-tenant use, the office building allows tenants to benefit from close proximity to the airport and Interstate 95 as well as the amenities offered at the Warehouse District. The office building will soon offer additional amenities including a structured parking garage, on-site restaurant, and pickle and Padel ball courts as part of a massive interior/exterior renovation project currently underway.
00SFOBA STAFFhttps://dev.sfoba.com/wp-content/uploads/2026/08/SFOBA-logo-sharpened-transparent.pngSFOBA STAFF2023-06-25 11:22:442023-06-25 11:22:44Cushman & Wakefield Arranges 12,000-SF Office Lease For Largest Privately-Owned Global Coworking Franchisor
Brand Atlantic Real Estate Partners and Wheelock Street Capital have completed the redevelopment of 111 Olive, a boutique office building in downtown West Palm Beach. The building is the first phase of Banyan & Olive, a Class A mixed-use development within the city’s Clematis Waterfront District.
111 Olive features newly renovated offices with 14-foot ceilings and pine timber wood ceilings. The building offers two 9,000-square feet suites and two 5,000-square feet suites, with one of the smaller suites fully built out for immediate move-in.
Tenant amenities include a golf simulator lounge and clubroom seating; art installations throughout the main lobby, elevator lobby lounges and office corridors; shower cabana changing rooms with private lockers and towel service; dedicated parking at 300 Banyan garage with direct connection from the main lobby; concierge attendant at main lobby desk for security, guest registry, mail, package storage and tenant requests; and club-level amenities at 300 Banyan, featuring an indoor/outdoor fitness center, open-air lounge and reservable outdoor event space.
00SFOBA STAFFhttps://dev.sfoba.com/wp-content/uploads/2026/08/SFOBA-logo-sharpened-transparent.pngSFOBA STAFF2023-06-18 20:01:422023-06-18 20:01:42Brand Atlantic, Wheelock Street Capital Complete Redevelopment Of West Palm Office Building
South Florida’s commercial real estate market for the first time demonstrated signs that it may be starting to feel the impacts of the Fed’s interest rate hikes to restrict inflation that began in March 2022.
The region’s office supply barely outpaced demand in South Florida as a whole, but results differed across asset type, location and in urban versus suburban areas, with Class A office in Miami’s central business district outperforming most of the region’s benchmarks.
Overall, the South Florida office market recorded 57,000 square feet of negative absorption in the first quarter of 2023. This was noticeably down from the nearly 383,000 square feet absorbed during the same period one year ago.
Vacancy also ticked upward 10 basis points from the previous quarter, but was down from the 15.3 percent reported at the close of the first quarter last year. New lease deals declined, totaling 1 million square feet of activity, down from the 1.6 million square feet transacted in the previous quarter and well below the 2.2 million square feet leased through the first three months of 2022. Broken out by county, Miami-Dade and Palm Beach counties both saw a similar drop with leasing activity falling just under the 50 percent mark from one year ago to 566,000 square feet and 249,000 square feet, respectively. Broward County had the sharpest drop as new deals were down 64 percent from one year ago to 204,000 square feet for the first quarter of 2023.
It’s no surprise that Miami-Dade County continued to make headlines and lead office demand throughout the tri-county area with nearly 125,000 square feet of positive absorption as vacancy fell 30 basis points year-over-year. This marked one of the strongest performances in the country — Miami recorded greater quarterly occupancy gains than any market in the South or West.
Broward County on the other hand experienced a more balanced performance, returning a minuscule 27,000 square feet of increased office space back to the market during the first quarter with vacancy only rising 10 basis points from the previous quarter. During 2022, Broward recorded a more substantial rise in vacancy when construction completed on the state’s largest project of the year, the 277,000-square-foot Optima Onyx Tower which remained almost 90 percent vacant in the first quarter of 2023.
Palm Beach was the county that took the biggest hit, with 144,000 square feet of net occupancy losses, the majority of which came from the exit of Newell, which vacated 100,000 square feet at in a Boca Raton submarket. The county’s vacancy stood at 11 percent, up 30 basis points from the previous quarter’s record-low rate, but still down 130 basis points year-over-year.
Top of the class
Two trends that have held throughout South Florida’s office sector overall included the flight-to-quality and desire for proximity to a downtown location. Class A space dominated in new leasing activity in the first quarter of 2023 with over 700,000 square feet of deals signed for high-end space, making up over 70 percent of South Florida’s office leasing transactions. Demand for these spaces continued to outpace supply within the region’s central business districts by a modest 20,000 square feet during this year’s first quarter.
Notably, Miami-Dade County’s central business district led in demand performance with nearly 79,000 square feet of absorbed space. Broward County’s central business district followed suit with 26,691 square feet of positive net absorption, while Palm Beach’s downtown submarket was, again, the only central business district to see a return of 17,735 square feet in supply. At first glance, it appears as if the downtown submarkets are seeing a slowdown in demand growth, but these modest numbers are more indicative of the lack of available space within key trophy buildings in the region’s central business districts. Downtown Miami led all submarkets in Class A leasing activity with over 168,000 square feet of deals signed during the first quarter. Downtown Fort Lauderdale also led in Broward County and followed closely behind Miami’s downtown area with 69,000 square feet.
Like leasing activity in the region’s key central business districts, office vacancy rates in the first quarter of 2023 also fluctuated by submarket and asset type. West Palm Beach’s downtown vacancy rate of 11.3 percent was the lowest throughout the region, while Class A space vacancy stood at 9.1 percent and is projected to hold until new construction is completed, which will be in 2024 at the earliest.
Miami’s overall vacancy rate of 13.3 percent in the central business district’s Class A office sector includes secondary older buildings that may not be considered “trophy.” When removing the A-minus buildings out of the inventory set, vacancy falls to around the 10 percent mark, and if isolating that figure to depict only the Brickell submarket, it falls even further to 9.1 percent. Broward County held the highest vacancy rate for any of the central business districts in the region with 18 percent at the close of the first quarter, but vacant space in the Las Olas Corridor fell to the 14 percent mark. Demand for high-end inventory pushed first-quarter asking rents past the $100-per-square-foot mark for both Miami-Dade and Palm Beach Counties while downtown Fort Lauderdale asking rents peaked over the $70-per-square-foot mark for the first time in recorded history.
Suburbia
Suburban submarkets told a slightly different story for office and continued to see a stronger return of supply with 77,000 square feet of negative absorption throughout the region at the close of the first quarter. Broward County’s suburban submarkets totaled over 54,000 square feet of negative absorption in the form of smaller tenants downsizing or moving out. Miami’s suburban sector was the only one to record positive net absorption in the first quarter, combining for more than 113,000 square feet, with the Airport West submarket making up over 60 percent of that total. This aided in allowing the 15.7 percent vacancy rate throughout the South Florida region’s suburban areas to hold level from the previous quarter and year-over-year. First-quarter leasing activity totaled over 772,000 square feet in South Florida’s suburban submarkets, a noticeable decrease from the nearly 1.6 million square feet leased during the same period one year ago.
What’s coming
The construction pipeline for office product is also beginning to dissipate across much of the country, but more than 2.3 million square feet of construction remained underway across South Florida at the close of 2023’s first quarter. Nearly two-thirds of this product was in Miami-Dade County — almost 40 percent of which came from 830 Brickell — and the remainder in Palm Beach County. The limited amount of new supply should keep vacancy well below the 20 percent threshold, signifying a more friendly tenant market during lease negotiations.
Ask and you shall receive
Finally, asking rents continued their record climbs, with all counties experiencing new peaks. South Florida’s overall average asking rate increased 3.4 percent year-over-year to $44.32 per square foot full service at the close of the first quarter in 2023. Palm Beach County led the region in growth, escalating 6.4 percent to $44.40 per square foot full service, while Broward County followed suit with a 4.8 percent year-over-year hike to $38.04 per square foot full service. Miami-Dade County’s growth noticeably slowed in comparison to the past three years, with a 3.3 percent increase year-over-year to $48.89 per square foot full service and can be attributed to the limited amount of available space in higher-tier Class A buildings. This allowed asking rents from lower-tier Class A and Class B office buildings to have more of an impact on average rates than previous quarters.
While many of the region’s office market fundamentals saw a slight shift this quarter, the numbers along with the region’s continued popularity as a spot to live, play and work all contribute to a favorable outlook for South Florida’s performance throughout the second half of 2023.
00SFOBA STAFFhttps://dev.sfoba.com/wp-content/uploads/2026/08/SFOBA-logo-sharpened-transparent.pngSFOBA STAFF2023-06-04 12:19:312023-06-04 12:19:31South Florida’s Office Sector May Be Cooling Off, But the Forecast Remains Sunny
Cohen Brothers Announces New 400,000 SF Class A Office Tower, Names CBRE Exclusive Leasing Agent
/in News/by SFOBA STAFFCohen Brothers Realty Corporation of Florida (CBRC) has announced the development of West Palm Point, a new 2.4-acre development with a 400,000-square-foot Class A office tower and amenities in West Palm Beach.
The 26-story office tower will offer tenants a variety of amenities including a one-of-a-kind private landscaped rooftop park, 14,416 square feet of premier ground floor retail space, multiple fast-casual restaurants, a fitness center, conference rooms and unobstructed views of the intracoastal waterway and Atlantic Ocean.
Pelli Clarke & Partners and Nichols Brosch Wurst Wolf are the architects of record.
CBRC has appointed CBRE as the exclusive office leasing agent. John Criddle, Joe Freitas and Max Pawk with CBRE will lead local marketing and leasing efforts in partnership with Marc Horowitz from Cohen Brothers in New York.
The West Palm Point development will occupy a full city block at the intersection of Okeechobee Blvd. and Quadrille Blvd. in downtown West Palm Beach, including a Class A office tower and an adjacent parking structure.
The 10-story parking garage will have space for approximately 1,250 automobiles and 120 bicycles, as well as a rooftop gathering area with a café, shaded seating, paseo, and water feature. Additionally, there will be outdoor seating between the office building and parking structure to help support population growth of downtown.
Construction is anticipated to commence in the fourth quarter of 2023, with expected tenant occupancy beginning in the third quarter of 2026.
CBRC is one of the foremost private office real estate development and management corporations in the United States, led by award-winning developer Charles S. Cohen. CBRC owns and manages over 12 million square feet of prime office, design showroom, and retail properties in Manhattan and Westchester County, New York; West Hollywood, California; Houston, Texas; and Dania Beach.
Gale Properties Appoints CBRE Exclusive Leasing Agent For West Palm Office Property
/in News/by SFOBA STAFFLocated at 312 Clematis St., the 25,000-square-foot property was originally constructed in 1925 as Anthony’s department store. Gale Properties acquired the property in 2016. Ownership plans to execute a capital improvement plan, including renovating the building’s exterior façade, installing a new elevator cab, and updating the common areas with new lighting and flooring.
CBRE Senior Associate Max Pawk will lead leasing efforts on behalf of Gale Properties with spaces ranging from 500 square feet to 4,000 square feet of contiguous space available for lease.
The property features four floors of office space with high ceilings and hardwood floors, set above ground floor retail.
Tenants have easy access to various restaurants and retail options, as well as nearby access to Palm Beach International and the Brightline train.
Plantation Medical Office Park Trades
/in Done Deals, News/by SFOBA STAFFAvison Young’s Florida Capital Markets Group completed the $15,450,000 sale of Plantation Medical Office Park, a six-building, single-story medical office campus totaling 63,319 square feet at 6710-6834 West Sunrise Blvd. in South Florida’s Plantation submarket.
The $244-per-square-foot transaction underscores the attractiveness of medical office assets as overall office sale activity has slowed.
Avison Young Principals John K. Crotty, CCIM; David Duckworth; Michael T. Fay, who is also Managing Director of the firm’s Miami operations; and Brian C. de la Fé sold the asset on behalf of PPP Capital, LLC. The buyer was Bezrat H., Corp.
Plantation Medical Office Park is in a densely populated, major commerce and medical hub with over 200,000+ residents, 7,000+ businesses, and $2.3 billion in total consumer spending within a five-mile radius. With exceptional visibility from Sunrise Boulevard, the Park is strategically located just three miles from Westside Regional Medical Center, a full-service 250-bed hospital. Notable tenants include American Access Care, Dickens Sanomi Academy, and Baptist Hospital of Miami, Inc.
Avison Young insights show the latest banking crisis has led to more economic headwinds for investors, rendering it difficult to secure financing for commercial real estate transactions, particularly within the office sector. However, the greater need for physical space and high costs associated with relocations and build-outs among medical office tenants abate the concerns of investors and financiers alike and make medical assets the exception during challenging times.
Cushman & Wakefield Arranges 12,000-SF Office Lease For Largest Privately-Owned Global Coworking Franchisor
/in Done Deals, News/by SFOBA STAFFCushman & Wakefield has arranged a new long-term lease totaling 12,149 square feet for Office Evolution and Venture X at the District Pointe office building in West Palm Beach.
Office Evolution and Venture X will lease the fifth floor and create a superior coworking space that offers a community of entrepreneurs, established businesses, and startups a flexible workspace and opportunities for professional collaborations.
Anthony Librizzi and Tara England of Cushman & Wakefield represented the landlord, District Pointe, LLC, in the lease negotiations. Derek Baker of Colliers represented the tenant.
Owner District Pointe, LLC is a joint venture between Verdex Construction and Index Investment Group that was formed to purchase the property in November 2021. As part of the acquisition, the building was rebranded as District Pointe and Verdex Construction announced plans to occupy a floor for their new U.S. headquarters.
District Pointe is located at 1501 Belvedere Rd. and sits directly across from Palm Beach International Airport. Recently made available for multi-tenant use, the office building allows tenants to benefit from close proximity to the airport and Interstate 95 as well as the amenities offered at the Warehouse District. The office building will soon offer additional amenities including a structured parking garage, on-site restaurant, and pickle and Padel ball courts as part of a massive interior/exterior renovation project currently underway.
Brand Atlantic, Wheelock Street Capital Complete Redevelopment Of West Palm Office Building
/in News/by SFOBA STAFFBrand Atlantic Real Estate Partners and Wheelock Street Capital have completed the redevelopment of 111 Olive, a boutique office building in downtown West Palm Beach. The building is the first phase of Banyan & Olive, a Class A mixed-use development within the city’s Clematis Waterfront District.
111 Olive features newly renovated offices with 14-foot ceilings and pine timber wood ceilings. The building offers two 9,000-square feet suites and two 5,000-square feet suites, with one of the smaller suites fully built out for immediate move-in.
Tenant amenities include a golf simulator lounge and clubroom seating; art installations throughout the main lobby, elevator lobby lounges and office corridors; shower cabana changing rooms with private lockers and towel service; dedicated parking at 300 Banyan garage with direct connection from the main lobby; concierge attendant at main lobby desk for security, guest registry, mail, package storage and tenant requests; and club-level amenities at 300 Banyan, featuring an indoor/outdoor fitness center, open-air lounge and reservable outdoor event space.
Source: RE Business
South Florida’s Office Sector May Be Cooling Off, But the Forecast Remains Sunny
/in News, Trends/by SFOBA STAFFBy Eric Messer
South Florida’s commercial real estate market for the first time demonstrated signs that it may be starting to feel the impacts of the Fed’s interest rate hikes to restrict inflation that began in March 2022.
The region’s office supply barely outpaced demand in South Florida as a whole, but results differed across asset type, location and in urban versus suburban areas, with Class A office in Miami’s central business district outperforming most of the region’s benchmarks.
Overall, the South Florida office market recorded 57,000 square feet of negative absorption in the first quarter of 2023. This was noticeably down from the nearly 383,000 square feet absorbed during the same period one year ago.
Vacancy also ticked upward 10 basis points from the previous quarter, but was down from the 15.3 percent reported at the close of the first quarter last year. New lease deals declined, totaling 1 million square feet of activity, down from the 1.6 million square feet transacted in the previous quarter and well below the 2.2 million square feet leased through the first three months of 2022. Broken out by county, Miami-Dade and Palm Beach counties both saw a similar drop with leasing activity falling just under the 50 percent mark from one year ago to 566,000 square feet and 249,000 square feet, respectively. Broward County had the sharpest drop as new deals were down 64 percent from one year ago to 204,000 square feet for the first quarter of 2023.
It’s no surprise that Miami-Dade County continued to make headlines and lead office demand throughout the tri-county area with nearly 125,000 square feet of positive absorption as vacancy fell 30 basis points year-over-year. This marked one of the strongest performances in the country — Miami recorded greater quarterly occupancy gains than any market in the South or West.
Broward County on the other hand experienced a more balanced performance, returning a minuscule 27,000 square feet of increased office space back to the market during the first quarter with vacancy only rising 10 basis points from the previous quarter. During 2022, Broward recorded a more substantial rise in vacancy when construction completed on the state’s largest project of the year, the 277,000-square-foot Optima Onyx Tower which remained almost 90 percent vacant in the first quarter of 2023.
Palm Beach was the county that took the biggest hit, with 144,000 square feet of net occupancy losses, the majority of which came from the exit of Newell, which vacated 100,000 square feet at in a Boca Raton submarket. The county’s vacancy stood at 11 percent, up 30 basis points from the previous quarter’s record-low rate, but still down 130 basis points year-over-year.
Top of the class
Two trends that have held throughout South Florida’s office sector overall included the flight-to-quality and desire for proximity to a downtown location. Class A space dominated in new leasing activity in the first quarter of 2023 with over 700,000 square feet of deals signed for high-end space, making up over 70 percent of South Florida’s office leasing transactions. Demand for these spaces continued to outpace supply within the region’s central business districts by a modest 20,000 square feet during this year’s first quarter.
Notably, Miami-Dade County’s central business district led in demand performance with nearly 79,000 square feet of absorbed space. Broward County’s central business district followed suit with 26,691 square feet of positive net absorption, while Palm Beach’s downtown submarket was, again, the only central business district to see a return of 17,735 square feet in supply. At first glance, it appears as if the downtown submarkets are seeing a slowdown in demand growth, but these modest numbers are more indicative of the lack of available space within key trophy buildings in the region’s central business districts. Downtown Miami led all submarkets in Class A leasing activity with over 168,000 square feet of deals signed during the first quarter. Downtown Fort Lauderdale also led in Broward County and followed closely behind Miami’s downtown area with 69,000 square feet.
Like leasing activity in the region’s key central business districts, office vacancy rates in the first quarter of 2023 also fluctuated by submarket and asset type. West Palm Beach’s downtown vacancy rate of 11.3 percent was the lowest throughout the region, while Class A space vacancy stood at 9.1 percent and is projected to hold until new construction is completed, which will be in 2024 at the earliest.
Miami’s overall vacancy rate of 13.3 percent in the central business district’s Class A office sector includes secondary older buildings that may not be considered “trophy.” When removing the A-minus buildings out of the inventory set, vacancy falls to around the 10 percent mark, and if isolating that figure to depict only the Brickell submarket, it falls even further to 9.1 percent. Broward County held the highest vacancy rate for any of the central business districts in the region with 18 percent at the close of the first quarter, but vacant space in the Las Olas Corridor fell to the 14 percent mark. Demand for high-end inventory pushed first-quarter asking rents past the $100-per-square-foot mark for both Miami-Dade and Palm Beach Counties while downtown Fort Lauderdale asking rents peaked over the $70-per-square-foot mark for the first time in recorded history.
Suburbia
Suburban submarkets told a slightly different story for office and continued to see a stronger return of supply with 77,000 square feet of negative absorption throughout the region at the close of the first quarter. Broward County’s suburban submarkets totaled over 54,000 square feet of negative absorption in the form of smaller tenants downsizing or moving out. Miami’s suburban sector was the only one to record positive net absorption in the first quarter, combining for more than 113,000 square feet, with the Airport West submarket making up over 60 percent of that total. This aided in allowing the 15.7 percent vacancy rate throughout the South Florida region’s suburban areas to hold level from the previous quarter and year-over-year. First-quarter leasing activity totaled over 772,000 square feet in South Florida’s suburban submarkets, a noticeable decrease from the nearly 1.6 million square feet leased during the same period one year ago.
What’s coming
The construction pipeline for office product is also beginning to dissipate across much of the country, but more than 2.3 million square feet of construction remained underway across South Florida at the close of 2023’s first quarter. Nearly two-thirds of this product was in Miami-Dade County — almost 40 percent of which came from 830 Brickell — and the remainder in Palm Beach County. The limited amount of new supply should keep vacancy well below the 20 percent threshold, signifying a more friendly tenant market during lease negotiations.
Ask and you shall receive
Finally, asking rents continued their record climbs, with all counties experiencing new peaks. South Florida’s overall average asking rate increased 3.4 percent year-over-year to $44.32 per square foot full service at the close of the first quarter in 2023. Palm Beach County led the region in growth, escalating 6.4 percent to $44.40 per square foot full service, while Broward County followed suit with a 4.8 percent year-over-year hike to $38.04 per square foot full service. Miami-Dade County’s growth noticeably slowed in comparison to the past three years, with a 3.3 percent increase year-over-year to $48.89 per square foot full service and can be attributed to the limited amount of available space in higher-tier Class A buildings. This allowed asking rents from lower-tier Class A and Class B office buildings to have more of an impact on average rates than previous quarters.
While many of the region’s office market fundamentals saw a slight shift this quarter, the numbers along with the region’s continued popularity as a spot to live, play and work all contribute to a favorable outlook for South Florida’s performance throughout the second half of 2023.
Source: Commercial Observer