Coconut Grove offices nearly full, demand strong

With very limited office space available in Coconut Grove, one of the most desired areas in Miami-Dade County, occupancy is at one of the highest levels there.

With a total inventory of 1,245,600 square feet of offices and a vacancy of 8.4%, Coconut Grove currently has no office space under construction, according to CBRE’s Miami Office third quarter report. The area’s average asking lease rate is $62.53 per square foot, and $67.11 per square foot for Class A space.

“Coconut Grove is one of the markets catering to the local demographics,” said Tomas Sulichin, commercial division president at Related ISG Realty. “It’s a very wealthy community and they don’t want long commutes anymore. So, I think a lot of developers are seeing the need for the local residents to have good product there.”

Coconut Grove has seen tremendous demand, said Tere Blanca, founder and CEO of Blanca Commercial Real Estate, who leases 2601 Bayshore Drive, which is to undergo a renovation starting the first quarter of 2023.

“We have some space now available,” she said. “But other than that, there is no new office in place. Everything that has been delivered has been fully leased.”

2601 Bayshore is a 22-story building with 294,000 square feet of Class A offices. There also is some space available at One CocoWalk, a five-story Class A office building, with 85,762 square feet of rentable space, which Blanca Commercial also leases, said Ms. Blanca.

“We have seen tremendous rate, a significant rent growth over the last 24 months,” she said. “The rent for the top-tier class A office towers has almost doubled within the last 36 months, and it has created the opportunity for other buildings to aim for Class A space.”

Some notable tenants coming to Coconut Grove include, D1 Capital Partners, which is leasing 25,000 square feet of offices at 2850 Tigertail Ave., a building developed by Related Group that is now fully leased; The Jordan Co., leasing 12,717 square feet in CocoWalk; Azamara Club Cruises, which is leasing 9,286 square feet in CocoWalk; and SH Hotels and Resorts, which has leased 5,800 square feet at Bayview Executive Plaza at 3225 Aviation Ave. and is expected to move in Jan. 1.

“We’re still competitive in terms of pricing, compared to New York City and other global cities in the world,” said Ms. Blanca. “So, from that standpoint, the financial services firms’ demand for office, especially during the last 24 months, drove tremendous rent growth because there was strong competition for space.”