Will Burbs Draw From Brickell Office?

MIAMI—Just how hot is Brickell office space? One building alone inked 15 leases—including nine renewals and expansions—totaling nearly 53,000 square feet.

Brickell Bay Office Tower, a 32-story, 280,500 square foot building in Miami's Brickell Financial District, is 93% leased to tenants like AON, NEC Corporation, British Consulate; 1st United Bank, and The Hackett Group, a publicly-traded global  advisory firm. That's even higher than Brickell's overall occupancy rate, which sits at about 85%, according to the Miami Downtown Development Authority Office Study.

“We've maintained Brickell Bay Office Tower's place among Miami's elite buildings, even as new towers enter the market,” says Brickell Bay Office Tower vice president Christian Driussi, who represented the building's ownership in the transactions. “We credit this activity to our waterfront location, ownership's ongoing investments in the property, and the strength of our tenants.”

Indeed, Brickell Bay Office Tower's lease activity in 2014 coincides with the completion of a $2.5 million capital improvements initiative that included upgrades to the building's corridors, common areas, as well as the modernization of the tower's elevator system. Located at 1001 Brickell Bay Drive, in the heart of Miami's Brickell Financial District and directly overlooking Biscayne Bay.

But will Brickell hold up against emerging suburban competition? Ken Krasnow, managing director for CBRE in South Florida, tells GlobeSt.com suburban and "pocket" urban office markets will heat up.

“In Miami, rising office rents downtown and 'commuter fatigue' will make suburban office space increasingly appealing for tenants,” Krasnow says. “Office properties in Coral Gables, South Miami, and Doral, which are closer to residential areas and offer more parking, will be the primary beneficiaries, along with some suburban office properties in Broward County.”

Coral Gables, for one, saw plenty of traction 2014. The Coral Gables office submarket continues to lead the way in terms of office market absorption, according to CBRE statistics. Tenants took down about 195,000 square feet of office space in Coral Gables during the first three quarters of 2014, more than any other submarket by a wide margin. CBRE's Maggie Kurtz tells GlobeSt.com, “We have seen a lot of tenants relocating from the Central Business District to Coral Gables because they like the ample parking, convenient access to Miami International Airport and the rich cultural, entertainment, dining options offered in Coral Gables.”