With more than three dozen cranes in the sky and a population that has doubled in just 15 years, Downtown Miami is one of the fastest-growing residential districts in the U.S.
That’s not a typo. Once a 9-to-5 business hub, our urban core is now an around-the-clock neighborhood attracting people from across the globe.
A strong residential market — coupled with surging investment among domestic and multinational companies and entrepreneurs — is fueling the downtown office market, a reliable bellwether for gauging Miami’s appeal among international firms and the health of our economy.
Premium space in class A, urban office buildings is being leased for record-setting rates topping $50 per square foot, and office properties are trading hands at prices well above the previous peak.
The wave of activity in our urban core is also reshaping Miami’s global image, infusing our brand as a gateway city for business with a dose of culture, youthfulness and cosmopolitan style.
Speak with executives in Latin America and Europe about Miami and the conversation often gravitates toward the topic of urbanization, specifically the progress taking place in downtown Miami and the Brickell Financial District. People from overseas are excited about our new museums, luxury hotels and boutiques, and the sheer level of investment and development underway.
The world’s changing perception of Miami is helping us compete for inbound investment and corporate relocations and expansions, since large companies located in the world’s major cities are accustomed to doing business in urban neighborhoods. We are leveling the playing field between Miami and London, New York, Sao Paolo, Mexico City, Panama City and others.
A number of multinational companies have recently opened or expanded their regional headquarters in Miami, including SABMiller, HBO Latin America, Mondelez, FedEx and Willis. All told, approximately 30 percent of the leasing activity in our urban submarkets is being generated by new entrants from outside South Florida, according to our firm’s market research.
Miami’s shift toward urbanization is also trickling down into key submarkets, breathing new life into neighborhoods like Coral Gables, Coconut Grove, South Miami and Doral. Just as we are seeing in downtown, each of these districts is experiencing growing demand for office space, increasing occupancy and rising leasing rates.
Urban areas are particularly appealing to the youngest members of our workforce, which is critical to attracting and retaining talent. Millennials, generally defined as 18- to 34-year-olds, now account for one-third of the U.S. workforce, making them the largest generation at work today.
Research shows millennials are more comfortable using public transportation, prefer walking over driving, and wish to live and work within the same neighborhood. These traits illustrate why millennials are seeking urban environments.
This trend is unfolding in downtown Miami, where 46 percent of residents are between the ages of 25 and 44, according to a 2014 study by the Miami Downtown Development Authority. We are seeing similar dynamics in areas like Coral Gables and Doral.
Developers across Miami are catering to these demographics by focusing on mixed-use projects, vertical development and urban amenities.
One of the best examples is All Aboard Florida’s MiamiCentral project in downtown, set for completion in early 2017. Phase one of the development will bring regular passenger rail service between Miami and West Palm Beach, eventually extending north to Orlando; 280,000 square feet of office space in two towers; and entertainment, residential and retail uses. Those living and working within MiamiCentral and in the immediate neighborhood will experience a true urban lifestyle.
Farther west, in the City of Doral, urban developments underway will deliver close to 2 million square feet of retail space and more than 5,500 residential units over the coming years. The largest projects, City Place and Downtown Doral, will create urban districts enabling people to live, work and entertain themselves without getting in a car.
In Coral Gables, developers behind the city’s first master-planned, mixed-use development, Mediterranean Village, have won initial approval to build a hotel, restaurants and retail space, 300,000 square feet of offices, and more than 200 residential units. Close to 1,000 apartment units under construction in and around the city will cater to millennials.
As commercial growth takes place in downtown Miami and more young professionals move into the area each day, we are seeing significant spillover into submarkets outside the urban core. This shift toward urbanization is a positive sign for our business base, our economy, and our international image.
Our public and private sectors have an opportunity to sustain these trends and support the growth of our educated workforce through investments in transportation and infrastructure, K-12 and higher education, and sustainable development.
Tere Blanca is president and CEO of Blanca Commercial Real Estate, chair of City Year Miami and a past chair of The Beacon Council.
Realtors may submit columns for Broker’s View of 700 to businesseditor@MiamiHerald.com. Questions, email rclarke@MiamiHerald.com. This column is primarily for brokers of residential real estate, but from time to time, we will publish columns about commercial real estate as well.