Tech Industry Leasing More Space In South Florida

Written by on 04.19.16 in Industrial, Office, Retail - No comments

Office leasing by tech companies has doubled in the last two years, according to a recent report by commercial real estate company CBRE.

The report was released in coordination with the eMerge Americas technology event, which takes place through Tuesday at the Miami Beach Convention Center.

In 2015, firms in technology-related industries accounted for 19 percent of office space leased in South Florida, up from 11 percent in 2013, according to the report by CBRE‘s Quinn Eddins, director of research and analysis, Americas Research.

“Those that have relocated or opened satellite offices in South Florida are largely attracted to the region’s global communications interconnectivity, strong economic and cultural ties to Latin America, and multilingual talent pool with advanced technological skills,” Eddins says in his report.

Space leased by technology-related companies accounted for nearly 848,500 square feet in new office leases during 2015, an increase of 83 percent over 2014 and more than double the space leased in 2013.

Exterior Plantation headquarters of Magic Leap

Exterior Plantation headquarters of Magic Leap

Magic Leap, the virtual reality company that leased space in Dania Beach and then Plantation, had a lot to do with the growth. In 2015, Magic Leap leased nearly 260,000 square feet for its headquarters at the former Motorola plant in Plantation.

The startup was founded by Rony Abovitz, a co-founder of Mako Surgical in Davie. Magic Leap is developing mulitple applications for its technology, which it describes as “a new mixed reality computing platform that will enable people to interact with the world in ways never before possible.”

CBRE said that while high-tech manufacturing and services is driving much of the growth, the sector also includes businesses such as software publishers, e-commerce and internet companies, manufacturers of advanced instruments, aerospace companies and telecommunications, as well as the biotech industry. Biotech includes research and development, pharmaceutical and medicine manufacturing, and medical equipment and supplies manufacturing.

Increased leasing activity coincides with growing venture capital investment in South Florida‘s technology sector.

Magic Leap led venture capital investments in Florida and was second in the nation in the first quarter of 2016 with $793.5 million in investments, according to the quarterly MoneyTree report released last week. The amount fell just behind car-sharing company Lyft in San Francisco, which raised $1 billion.

But the growth in venture capital also was in biotechnology, health care services and medical devices and equipment industries, which accounted for over half of the South Florida businesses receiving venture capital in 2015, and over two-thirds of venture capital investment in the region, according to CBRE.

Another trend over the last two years is the blossoming of the “shared workplace” sector — co-working spaces that cater to freelancers, startups, creative workers, small businesses and even more large businesses.

Co-working space increased from 40,000 square feet in 2012 to more than 65,000 square feet in 2015, with co-working companies WeWork, General Provision and Pipeline expanding in South Florida, CBRE said. Executive suites also added space in the region.

CBRE said Florida‘s tech growth may be “somewhat insulated” from contractions in other markets, such as the San Francisco bay area, Austin, Chicago, San Diego and Denver, because 63 percent of the South Florida office space leased is by homegrown companies founded and headquartered in the region.

Another insulating factor is most tech office leases are small, under 15,000 square feet, unlike larger markets where a tech giant might sign a lease for a half million square feet or more, CBRE said.

 

Source: SunSentinel

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