Downtown Miami is not experiencing office space reduction but growth, as a variety of buyers and renters are coming to the area from all parts of the globe, despite some negative net absorption in the market at the end of 2021.
Downtown Miami has an office inventory 32 buildings, encompassing 6,813,620 total square feet and a total vacancy rate of 24.4%. It ended the year with a negative net absorption of 29,748 square feet, no new completions but with 760,000 square feet of Class A office space under construction. Its direct asking rate in $50.52 per square feet, according to Collier’s 2021 Q4 Office Market report.
Nitin Motwani, managing principal of Miami Worldcenter and managing partner at Merrimac Ventures, said he sees the market very healthy, with great interest from buyers from Latin America, and various parts of the country, including New York, Boston, the San Francisco Bay area, Chicago and Washington, DC.
For every 10,000 LinkedIn members in South Florida, 17.23 workers moved to the city during last year, Colliers reported.
“The good thing about downtown is that the supply has become very diverse,” said Mr. Motwani. “And there’s a lot of people looking for office space now; one of the challenges is that we don’t have a lot of space.”
Miami Worldcenter, 27 acres between Northeast Second Avenue and Miami Avenue to Eleventh Street in downtown, is working with partners to develop several projects to open this year, including retail, residential and hospitality developments that amount to $4 billion in new investments.
The developing master plan is to feature 300,000 square feet of retail, food and beverage and entertainment space, according to Miami Worldcenter.
Tenants such as Maple & Ash, El Vecino, etta, Brassiere Laurel, Sephora and Lucid Motors are to open this year, and Bowlero is to open in 2023.
On the residential side, at Paramount Miami Worldcenter, residences average 1,600 square feet per unit and in The Crosby, the average is 600 square feet per unit. “It allows young professionals or even [university] students to find a place to live in downtown, but also allows a family of three or four who are looking for a little bit more space,” Mr. Motwani said.
As part of the Legacy Tower project in Miami Worldcenter, there will be 200,000 square feet of office space, already fully leased. “And that is going to a number of ultra-high-end medical uses right in the center of downtown,” Mr. Motwani said, referring specifically to Blue Zone Medical and Wellbeing Center, which he said is satisfying a demand for medical tourism. “Medical groups want to be close to where the density of people is, and that particular building has condos and a hotel as well,” the Legacy Hotel and Residences.
New York City-headquartered real estate giant Related Companies announced the development of 750,000 square feet of class A office adjacent to Miami Central, the Brightline’s Miami station, and the Metrorail, Metromover and the future Tri-Rail station.
“This is a top-tier developer who owns some of the nicest office spaces in New York City, making a bet not only on the residential market in downtown, but also on the incredible growth of office, and the particular choice that office is more and more looking to be in downtown and close to transit,” said Mr. Motwani.
CitizenM’s Hotel is to also open in the first quarter of 2022, according to Miami Woldcenter’s master plan. It is to be a 351-room, 12-story, 128,000-square-foot boutique hotel designed by Gensler Architects along Northeast Second Avenue between Seventh and Eighth streets.
“I think we will see more of everything,” Mr. Motwani said. “When we embarked at the Miami Worldcenter journey, we pictured a downtown where people could walk, ride a bike, push a stroller, get on public transportation or drive a car, and in this day and age, we’ve seen all of that happen. We are the confluence of our culture, entertainment, transportation and education… just the beginning of the evolution of downtown into a fully integrated community.”