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.
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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