Condo Boom Stimulating Class A Office Development
Loretta Cockrum, President of the Foram Group (builders of the Brickell Financial Center) has said that the condo market boom has impacted the demand for Class A office space. Most agree that the condo boom, with all of its problems, does have one major positive aspect: the improvement of Miami’s demographics. For Miami, the status quo means mostly low income. Although not likely to quickly change, the incoming occupancy waves in and around the urban core will bring up income levels so that they are more compatible with declining home prices. This demographic improvement, according to Loretta, has and will continue to result in significant high quality commercial development.
Local Small Business Owners Uninterested in Green
Regarding the “Green” or LEED aspects of the Brickell Financial Center, Loretta stated that local small business owners have been mostly indifferent to green development but larger outside corporations based out cities like Chicago, NYC, and San Francisco have come to expect green buildings. According to her, these types of companies are the ones likely to set up shop and bring jobs and affluence to the local market.
Commercial Market is Looking Up
If large corporations are persuaded to do business in urban Miami, then corporate condo-bundle acquisitions at below prevailing prices (sometimes 30% less) are likely. All in all, Ms. Cockrum and representatives of Cushman and Wakefield agree that the Class A commercial market will remain strong as new inventory comes in 2009. With Class A rates stagnant throughout the 1980’s and 1990’s, along with the lack of new inventory added, and a small office market compared to most other U.S. urban centers, Miami’s Class A market is primed for growth.
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