What Office Tenants Want in 2014

In 2013, the office market in commercial real estate grew stronger. Many hope 2014 will continue office space growth with increased leasing activity. Miami has already come a long way since their office market crash in 2010. View our website for more information on Gainesville Florida office space


By Jennifer LeClaire l Globe St. 

MIAMI—Miami’s office market has come a long way since 2010, when almost 2 million square feet of new product flooded the urban core after the crash. But what does 2014 hold for Miami's office sector?

GlobeSt.com caught up with Charles Barton, a managing principal at tenant advisory firm Cresa South Florida, to get his take on the topic. He told us to expect a continued balancing act of twin dynamics from tenants—focus on occupancy cost reduction and creating productive office environments.

“Tenants continue to seek aggressive ways to reduce costs while at the same time improving the office environment experience for employees,” Barton says. “More and more, office design trends are required to accomplish both.”

Barton points to various officing trends that are making their mark in Miami and beyond, including telecommuting, non-assigned workspaces, collaborative work areas, greater use of technology, and flexible spaces. All of these concepts, he says, appeal to the younger workforce and allow companies to reduce their physical footprint and occupancy costs.

“I’m seeing a need for what I call ‘just in time space’,” Barton says. “There’s less space banking. Tenants are not willing to carry as much future growth space. They are relying on the ability to add additional office space on an almost as-needed basis. I predict landlords that are able to provide flexibility will win market share.”

Barton is also predicting positive office space absorption in 2014—but not by much. As he sees it, leasing activity will be lighter in 2014 than in 2013 because many expiring leases have already been renegotiated.

While landlords are psychologically bullish, he says they may be getting ahead of actual market conditions. In order to stimulate leasing activity and take marketshare, Barton says landlords with significant vacancy will probably have to be more aggressive than originally planned in 2014.

“After five years of relative stability, I expect to see increasing operating expenses and real estate taxes,” Barton says. “Tenants are starting to get concerned that landlords will lose focus on cost reduction efforts as both occupancy rates and assessments start rising. However, if costs increase unreasonably you can expect tenant backlash in the form of audits, relocations and other protective measures.

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Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

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