Foreign Companies Leasing More Office Space in Miami

MIAMI—Last week I reported on CBRE stats that reveal the Coral Gables office submarket is leading the way in office absorption. Tenants leased about 180,000 square feet of Coral Gables office space in the first three quarters of 2014. That's more than any other submarket so far this year.

The report sparked so much interest that I decided to drill down deeper into the numbers. I caught up with CBRE's Diana Parker and Maggie Kurtz to get more of the story in part one of this exclusive interview. Be sure to come back this afternoon for part two, in which this dynamic office leasing duo will discuss the industries gravitating toward Coral Gables and what lies ahead for Miami's office market.

GlobeSt.com: Give us a snapshot of the Miami office market.

Kurtz: The Miami office market is in the midst of a prolonged recovery and is going to continue to perform very well over the next few years thanks to both organic job growth and several new-to-market companies. A lot of those companies are fleeing high-tax states like New York, Illinois, and California, but we're also seeing a lot of foreign companies set up shop in Miami.

Many of them are from Latin America and the Caribbean, as you might expect, but interestingly we're seeing a lot of companies from Europe and Asia looking at Miami. London-based telecom company Cable and Wireless signed one of the largest leases in Coral Gables in 2013, at Columbus Center, and earlier this year they exercised a right to expand and will be taking occupancy next month. In short, we've seen a sharp increase in leasing activity over the last 12 to 18 months, rental rate increases across the board and fewer concessions all around. 

GlobeSt.com: The Coral Gables market is performing unusually well this year – how do you explain that?

Parker: Yes, that submarket is doing very well, with approximately 180,000 square feet of space absorbed this year. I think that's a result of a few things. 

For one, the ever-increasing traffic in Downtown and Brickell is resulting in companies questioning whether they really have to be there. One trend we're seeing is company decision-makers favoring proximity to home, and great amenities, over a Brickell address. 

Coral Gables happens to have several quality, class A intuitionally owned office properties that have a high “walkability factor” and sought-after amenities such as restaurants, hotel and retail. Easy access to Miami International Airport is another selling factor.