The Miami commercial market, centered on Brickell and the Central Business District, is strengthening, when, only two years ago, it was a largely empty neighborhood with a series of vacant and soon-to-be-built office buildings.
(Listen to The Real Deal Miami Podcast on Brickell’s office market below featuring Brickell Bay Office Tower’s Christian Driussi and Jones Lang LaSalle’s Richard Schuchts)
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The Brickell-downtown Miami submarket had a 21.5 percent total vacancy rate at the end of the year. That number is still high, but it follows the addition to the market of more than 1.3 million square feet of space in just two buildings, according to Colliers International South Florida.
A number of firms, including 1st United Bank, Bancard and Syntel have entered the area recently at Brickell Bay Office Tower.
“We’ve been seeing a lot of renewals from existing tenants and also new tenants,” said Christian Driussi, vice president and general manager at Brickell Bay Office Tower, which is located at 1001 Brickell Bay Drive. “What we’ve been seeing is a market that is stabilizing.”
Driussi attributed the market’s improvement in part to newly available credit, and an increase in cash investors over the last four months.
According to a report earlier this month from Cushman & Wakefield, vacancies throughout Miami-Dade County were down for all of 2010 to 17.8 percent. That number represented a drop from a peak in the first quarter at 18.5 percent.
While the Brickell submarket’s vacancy rate is higher, it also boasts the most Class A space, at 4.41 million square feet, and the highest Class A rents — at $41.48 per square foot, according to Colliers.
Driussi, whose Brickell Bay Office Tower announced earlier this month that it had secured 70,000 square feet in leases in 2010, said the new residential vibrancy in the area would have a positive impact for the commercial market in Brickell.
“I think it will be extremely beneficial, what’s happening on the residential side,” Driussi said. “I came here in the year 2000, and Brickell was completely different. Right now, when I leave work, even late at night, I see a lot of people walking, strollers, a lot people jogging. For these people they live here and work.”
Another unsung boost could come from downtown Miami’s burgeoning health district, centered on the new University of Miami Life Science and Technology Park.
“What we’re going to see for growth is healthcare, and that great huge health district is going to be a big driver for the Central Business District, and they’ll play off of each other really well,” Schuchts said.