Published by Bisnow South Florida, April 21, 2021
Miami broker Arden Karson announced two sales this week. One was an office condo on Biscayne Boulevard, the city’s main artery. It had gone on the market and was under contract to a seafood company just a day later for $330 per SF.
The other deal wasn’t as fast, but nearly three times as expensive: the commercial space on the ground floor of the 51-story Biscayne Beach residential condo, which sold for $976 per SF to a crypto finance firm, XBTO Group.
Courtesy of Arden Karson
Biscayne Beach, in the Edgewater neighborhood of Miami.
“Everybody now wants a piece of Miami,” said Karson, who led CBRE in South Florida before launching her own firm, Karson & Co., last year. “It’s irreplaceable real estate. There is not a lot of supply on residential and even commercial. My office leasing colleagues are slammed right now with showings, inquiries and deals.”
Karson said that with South Florida land-constrained and currently experiencing an influx of high-profile people and businesses from other parts of the country, the seafood company knew it should pounce once it settled on a space it liked, and the crypto firm loved the 5.4K SF office space, which had been conceived as a restaurant space and has a 2.5K SF terrace.
According to JLL’s most recent Office Insight Report for Miami, Q1 marked the fourth consecutive quarter of negative absorption, but “recent leasing activity suggests that occupancy gains will resume before the close of the year.”
According to CBRE, Miami is the only market in the country that will see office rents grow in the next two years.
“I would venture to say that Miami’s got the strongest commercial real estate market in the country right now. And I would say that new company growth is probably higher than any other major markets, including Boston, Chicago, New York and L.A.,” said Donna Abood, principal and managing director at Avison Young.
Leases are running about $3 to $5 per SF higher than they were pre-pandemic, Abood said. According to Avison Young’s Q1 market report for Miami, the average asking rate is $42 per SF.
At 830 Brickell, a high-end office tower under development from OKO Group, “rates go as high as $84 per SF, which is unheard of in the city,” Abood said.
She is working with a new-to-market fintech company that she can’t yet disclose but which is seeking space for a U.S. headquarters. She said that according to the economic development agency The Beacon Council, there are 77 companies in the process of relocating to Miami.
“So it’s not hype anymore,” Abood said. “They’re coming in, they’re taking 20K, 30K, 40K, 50K SF.”