Markets with Upside Potential Are Key to the Miami Office Market
Skyrocketing land values and increased construction costs are some of the challenges for office developers to overcome, but that doesn’t mean we won’t see better office space with higher rents. A trend that has been unique to this cycle has been the acquisition of office buildings in secondary markets with significant upside potential. Repositioning a good asset in a centrally located area with pent-up demand can be a more attractive business model than new construction. The key is in finding markets with upside potential as South Florida’s population continues to explode and demand for commercial space grows.
Miami Gardens is a market with upside potential. I recently relisted the 193,406-square-foot Lincoln & Washington Square office complex in suburban Miami Gardens with a tremendous repositioning potential. With an asking price of $16.75 M, the 9.6-acre complex has ample space to accommodate large tenants. It’s current occupancy rate is about 68 percent.
The location provides strategic access to mass transit and major expressways, including I-95, the Palmetto Expressway (826) and the Florida Turnpike. This property is a good example of the type of assets that will dominate the transaction landscape this year. As the demand for large space required for education, healthcare, government and other sectors grows, repositioning older assets will be more feasible than building new suburban office buildings – at least in the near future.