Office Construction Returning To Broward County

Written by on 06.02.15 in Investment Trends, Office - No comments
Duke Realty is developing a 144,000-square-foot building off Interstate 75 near Pines Boulevard in Pembroke Pines

Duke Realty is developing a 144,000-square-foot building off Interstate 75 near Pines Boulevard in Pembroke Pines

Broward County’s office market is by no means booming.

But it is back. New offices are sprouting up again across Broward in response to a pent-up demand for space after years of business cutbacks.

Duke Realty is developing a 144,000-square-foot building off Interstate 75 near Pines Boulevard in Pembroke Pines. It’s the largest office project in Broward since 2008 and the first of four buildings totaling nearly 600,000 square feet that Duke is planning on the site.

Ed Mitchell, senior vice president of Duke, said his firm is negotiating with major tenants interested in taking the entire first building for their headquarters. “What we’re really looking for in these buildings is corporate America,” he said.

South Florida’s commercial real estate market languished after the housing collapse and later the financial crisis. Layoffs and delayed expansions reduced the immediate need for office space. New construction was out of the question because landlords had trouble filling existing buildings.

“But now people are hiring again,” said Brady Titcomb, associate director of the JLL real estate firm in Fort Lauderdale. “Tenants in smaller spaces are planning for growth whereas over the last few years they were planning to downsize.”

In the first quarter of 2015, Broward’s overall office vacancy rate was a still-high 15.4 percent, but that’s down from 17.9 percent in the first quarter of 2014, according to JLL. What’s more, few existing buildings can accommodate large blocks of space, brokers say.

One West Las Olas rendering

One West Las Olas rendering

Attorney Jeff Ostrow expects to complete his 40,000-square-foot One West Las Olas building this fall in downtown Fort Lauderdale. His 50-person law firm will take more than half of the building, and Ostrow has leased the rest.

Miami-based Riviera Point Development Group recently opened 38,000- and 32,000-square-foot office buildings geared toward smaller tenants in Miramar. Construction on a third building, the 76,000-square-foot Riviera Point Corporate Center, started last month.

The Duke building, expected to be complete by November, is the biggest office project in the county since the Stiles firm opened a 200,000-square-foot headquarters for AutoNation in downtown Fort Lauderdale in 2008.

Duke’s four-building development, called Pembroke Pointe, is within walking distance of the Shops at Pembroke Gardens, a 400,000-square-foot shopping center.

Office construction isn’t as far along in Palm Beach County, though at least two projects are in the planning stages. Carl DeSantis, founder of the former Rexall Sundown Inc., is part of a group that hopes to build 83,000 square feet of offices at Atlantic Crossing, a mixed-used project proposed for East Atlantic Avenue in Delray Beach. And an affiliate of DiVosta Investments is talking to the city of Palm Beach Gardens about the potential for more than 200,000 square feet at Alternate A1A and PGA Boulevard.

“It’s encouraging to see shovels getting dusted off,” said Peter Reed, a broker at Commercial Florida Realty Services in Boca Raton. “In 2010, there wouldn’t have been a thought of new office development. But at this point, it’s not so far-fetched.”

While many consider Boca Raton the county’s most prestigious office market, the city likely won’t see plans proposed anytime soon, Reed said. Existing buildings still have vacancies, and part or all of Office Depot’s 625,000-square-foot headquarters could be available for lease once the office supply giant merges with rival Staples.

 

Source: SunSentinel

Leave a Comment