South Florida’s commercial office market continues to grow compared to the rest of the United States due to large demand. Even after the pandemic switch to remote work, Miami’s market in particular still has an extensive list of tenants, with a constant city growth. This sentiment comes from many real estate executives in the city at Commercial Observer’s series of Future Forward events in major cities across the country. Island Capital Group’s CEO Andrew Farkas kicked off the event with a fireside chat.
In the mix of 2020, offices migrated to Miami from New York City due to the looser pandemic restrictions, expediting the city growth. Since then, Don Peebles, chairman and CEO of developer and owner Peebles Corporation emphasizes the “tremendous demand” for the commercial office market in the city. New users in the city include Citadel, 830 Brickell, Blackstone, Microsoft, FTX, and more.
But prices have expedited as a result. Not only in the real estate market, but Howard Lorber, president and CEO of Vector Group Ltd. and executive chairman of residential brokerage Douglas Elliman noted that the residential frenzy has raised the prices of mansions in Palm Beach Country from $6 million to $24 million.
Investors are now starting to believe that pricing will be less aggressive, as 2022 valuations are moving back. As a result, going into this post-pandemic recession, speakers suggested pulling back from comparing the high 2021 industry prices as a result of the pandemic.
All of this migration and growth still comes with a price. Speakers at the event emphasized that Miami’s infrastructure is unable to keep up with the growing city, with sea levels rising and strained roads and schools. This will be something that, alongside the economic concern, will need to be observed coming into the recession. To read the full article, click here.