Posted on October 18, 2022 · Posted in Investments, Office

As the pandemic approaches its third year, more people are returning to the office in South Florida than most places north of the Rio Grande, according to a recent study from Avison Young.

But South Floridians are still not working in the office as much as they did prior to Covid-19 shutdowns in mid-March 2020.

Office visits in South Florida for the week ending Sept. 19 are 54.8% of where they were in the week ending March 2, 2020, according to data collected by Avant, a proptech platform used by Avison Young to measure the movement of peoplein American and Canadian cities.

In comparison, office visitors this past September were 45.4% compared to early March 2020 prior to government mandated shutdowns in the rest of the U.S. and Canada.

“Class A office building in downtown areas with retail typically attracted more workers,” said Greg Martin, a principal and managing director of office leasing at Avison Young‘s Fort Lauderdale office. “The tenant office user is interested in going into quality assets and they’re taking advantage of those amenities and the environment surrounding those properties.”

As for why South Florida offices had a higher rate of return than most parts of the U.S. and Canada, Martin said it has to do with the region’s lifestyle and climate. In New York and Chicago, workers often have to commute in cramped trains and adverse weather conditions.

“If I wake up tomorrow and thereare four inches of snow and I have the ability to work from home, I’d rather not go back to the office,” Martin said.

In Miami-Dade County, office visits were 59.4% of what they were prior to Covid-19 shutdowns. But there is a widening gap between Class A and Class B assets in Miami-Dade, Avison Young noted. Top-of-the line Class A office assets had 67.3% of its Covid-19 visits while Class B offices only had 35.4%.

Office rents in Miami-Dade averaged $49.13 a square foot in the third quarter, according to Avison Young statistics. Class A office rents averaged $54.63 a square foot. Class B rents averaged $37.31 a square foot. Within Miami-Dade’s submarkets, Brickell had the highest asking rents at $70.75 a square foot, followed by $66.67 a square foot in Biscayne Corridor, $64.15 a square foot in Greater Miami Beach, and $53.89 a square foot in Aventura. Average rents in other Miami-Dade submarkets range from $30.25 to $51.31 a square foot.

In Broward County, office visits recovered by 53.4% from just prior to lockdowns with the rate of recovery higher in urban downtown markets than in suburban ones. In urban downtown markets, the office visitor rate was 62.3% what it was just prior to the Covid-19 lockdowns. In the urban-suburban market it was 61.1%. In the suburban market it was 49.2%.

According to Avison Young, the average asking rent in Broward was $38.47 a square foot in the third quarter with Hallandale Beach landlords demanding an average of $59.38. In Downtown Fort Lauderdale, rents averaged $50.52 a square foot. Rents in Broward’s other submarkets ranged from $29.86 to $36.87 a square foot.

With average rents of $43.74, Palm Beach County surpassed the rental rates sought in Broward. The highest office rents in Palm Beach County, and the rest of South Florida, are charged in the wealth Town of Palm Beach where they average $98.62 a square foot. In Downtown West Palm Beach office rents averaged $66.46 a square foot. Everywhere else in Palm Beach County office rents averaged between $21.72 and $42.43 a square foot.

 

Source: SFBJ

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