Tech Industry Office Leases Surging In South Florida

Written by on 05.05.15 in Investment Trends, Office - No comments

The technology sector showed rapid growth in signing leases in South Florida, according to new research from CBRE.

The industry accounted for 369,000 square feet of new leases and expansions in the tri-county area in 2014, a 109 percent jump from the year before, said CBRE Florida Director of Research and Analysis Quinn Eddins. Without the tech sector, new leases and expansions would have declined 16 percent, so South Florida can thank this industry for the overall increase in office occupancy rates, he said.

The local tech industry is in the spotlight now with the eMerge Americas Conference taking place at the Miami Beach Convention Center.

We’re not Silicon Valley by any means – yet. The tech sector accounts for 3 to 5 percent of all occupied office space in South Florida, Eddins said. However, it’s becoming more important as the industry made up 10 percent of all the new leases and expansions signed here in 2014. Tech companies prefer clustering together so the local growth should feed itself, Eddins said. Clusters attract a larger talent pool, draw capital and aid collaboration, he said.

Geographically, Broward County was the biggest winner. The 97,000-square-foot lease that Ultimate Software signed in Weston was the biggest tech deal in South Florida by far, Eddins said. The next largest tech leads were 35,000 for Digital Latin America in Doral/Airport West and 21,000 square feet for Unified Physician Management in Boca Raton.

CBRE Senior VP and office leasing specialist Diana Parker said there’s been tremendous growth in inquiries by new-to-market tech companies for office space in Miami, but not all properties are good candidates for them. “They are not the average user,” Parker said. “The office space has to expand beyond their four walls.”

Tech companies need an environment that will attract talented employees. Parker said this means properties with great walkability, many amenities such as wellness, event and meeting space, and the ability to control their own air conditioning and janitorial services. Having high speed Wi-Fi is a must, she said.

Technologies companies are especially attractive to landlords because they generally pay high rent and they’re fast growing, with the high likelihood of expansion in the future, Parker said. One of the best ways a landlord can attract companies is to promote an open office layout with lots of common areas, or welcome a co-working space, where many tech companies first start, Eddins said. Co-working tenants signed 120,000 square feet of new leases and expansions in South Florida in 2014, up from 37,000 in 2013, he said.

 

Source: SFBJ

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