Miami is thriving as the economic expansion continues, creating new jobs, as well as fierce competition for top talent. To gain an edge, savvy business leaders and HR professionals are working alongside office space experts to develop real estate strategies that attract and retain talent, while maximizing their investments into their workplaces.
Cushman & Wakefield’s new national occupier report, Space Matters, dives deep into the top office space trends impacting today’s tenants and landlords. The report examines how these factors are affecting office markets in 40 metros throughout the United States, including Miami.
The areas of focus are:
Occupiers have been allocating less square footage per employee, but that trend is starting to slow down as businesses grapple with the right balance of personal, private, communal and break space.
Miami’s office density is tighter than most markets with only 155 square feet per employee being allocated. The square footage per employee also dropped significantly in Miami over the past eight years. The 18.5 percent drop is only surpassed by two other markets when ranked by total nonfarm employment (Atlanta and San Francisco).
Common amenities – such as fitness centers and cost-effective food options – remain very important. However, there is large opportunity on a national scale for growth in how technology amenities are leveraged by occupiers and landlords.
In Miami, landlords recognize the added value amenities offer tenants, and many are investing capital into extensive improvements projects to bring properties into the modern era. Occupiers understand that improvements in technology have made it easier to work remotely, and therefore, they must give workers a reason to want to be in the office. Many Miami occupiers are focused on creating attractive, functional and flexible work spaces that encourage employees to be there, instead of at home.
In many urban submarkets, parking supply is a challenge. Prices have been increasing, and occupiers are looking at creative options to meet the challenge. Also looming in the future is what impact autonomous vehicles may have on parking demand.
Parking allocations in Miami are 2.1 spots per 1,000 and below the national and South region averages. Parking costs are in line with the national average ($158 per month per space) but are the second highest in the South region.
Free rent and tenant improvement allowances increased over the past year, but gains were driven by gateway markets in 2017. This trend will spread and some secondary markets will soften as absorption slows down and/or new supply comes online.
Concessions in Miami did decline last year with free rent being cut in half and TI allowances dropping 14.3 percent. As tenant demand increased throughout 2017, landlords were confident in raising asking rents and decreasing the amount for concessions, while still being able to lure tenants to their buildings.
Read the full Space Matters report here.