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WILL LOOMING JOB CUTS SPELL DOOM FOR THE OFFICE MARKET?

Last week’s national GlobeSt.com Quick Poll asked readers if looming job cuts would spell doom for the office market. Most respondents said it would, with only 34% responding that the cuts won’t have a vacancy rate impact. Tom Capocefalo, managing director for Studley’s South Florida office, who advises tenants in all three counties within suburban and CBD markets, shares his thoughts on the subject with GlobeSt.com:

“My view is that the job cuts probably do spell doom in general when you collectively mix the three-county market. If one looks down from 30,000 feet in the air, there will be an impact.

“More specifically, the predominant job cuts are in the Fortune 1000 corporation environment that tend to hold space in the suburban locations. Those companies, such as mortgage services and software development industries, might have a larger employee pool with back-office positions in the suburbs that tend to be diminished first.

“I think the CBD environments of Miami, Downtown Fort Lauderdale, Boca Raton and West Palm Beach will probably fare a little better over this period of time. Those environments tend to cater to more financial services banking firms, international or private investment banking firms, law firms or other professional users. Markets that are seeing vacancies higher than in the CBD are submarkets in Broward County, such as the Sawgrass market, possibly the Plantation market and parts of the Airport West market in Miami-Dade.

“The sentiment is that the loss of jobs is going to have a greater impact over a longer period of time on suburban markets than on downtown markets. High-profile buildings tend not to experience the immediate negativity of job losses because more people want to be in the finer buildings, even though they cost a little more.”

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