South Florida is home to one of the nation’s most dynamic and unpredictable commercial real estate markets. While anticipating what’s ahead in 2011 is no small task, seasoned real estate pro Tere Blanca’s predictions for the new year are as good as any.
GlobeSt.com Florida editor Jennifer LeClaire conducted a multi-part interview with Blanca, covering topics ranging from the economic metrics driving outside investment in South Florida real estate, to the factors that have fueled Blanca Commercial Real Estate’s growth in its first two years of business. Links to the three-part interview are below, but here are some key passages:
GlobeSt: So we’ve long hit the bottom?
Blanca: We hit bottom in 2009 and early 2010, and now we are in for a steady recovery during the next two to three years. We have seen large users of office space maintain—and in some cases, even grow—their space requirements even after having made adjustments to increase workplace densities to drive space efficiency. This marks a dramatic change from 2008 and 2009 when the trend was to contract as a result of reductions in headcount. The office market is closely tied to employment. We will need sustained employment growth for this positive trend to continue. Florida’s 12% unemployment rate is among the five highest in the U.S. Although Florida benefitted from 30,000 new jobs this year, we need to accelerate this trend to continue to drive positive absorption of office space.
GlobeSt: Are you seeing more upsizing or downsizing? Are companies looking for bargains? Are companies moving to obtain cheaper rent? Blanca: We’re seeing heightened interest among new-to-market office users, from large and small, international and domestic. Major companies and entrepreneurs are attracted to the business friendly environment in Florida—no personal income tax. It is encouraging that decision makers are seeing the potential here in Miami and across the Americas, and making the decision to invest in Miami for the long-term. Most importantly, users are not contracting as they were during 2008 and 2009. We are seeing commitments for the opening of new offices and expansions. Users are however finding ways to use space more efficiently than during the past decade and making sure leases provide flexibility to navigate more effectively through cycles.
GlobeSt: How does the present and future of commercial real estate in Miami look to you? Blanca: We’re seeing more interest from companies that are new-to-market, especially those who see the potential in Miami and the Americas over the next decade. Miami has some very valuable assets to offer, notably the diversity of our population—multi-cultural and multi-lingual—and international diverse business base. The expansion and renovation of Miami International Airport and the Port of Miami will also drive our continued growth. A majority of Miami businesses are actually small and mid-size entrepreneurial companies, complemented by more than 1000 multinational firms with a local presence. In many cases, Miami serves as those global firms’ stepping stone to Latin America and the Caribbean. I’m bullish on Miami—and our real estate market.