One metric for measuring growth in the South Florida technology industry is through real estate relocations and expansion. A report released this week by global commercial real estate service firm CBRE shows that office leasing by tech firms has doubled in the past two years.
Fueling this trend: Magic Leap’s expansion in Plantation, the growth spike in biotech leasing and a continued expansion of co-working companies.
In 2015, firms in tech-related industries accounted for 848,000 square feet in new office leases, an 83 percent jump from 2014 and more than double the space leased in 2013, according to the CBRE report “Technology Sector Increases Its Footprint.” Magic Leap, the Google-backed mixed reality technology startup, accounted for 260,000 square feet of that, leasing much of the former Motorola facility in Plantation. Modernizing Medicine and MDLive both expanded in 2015.
In percentage terms, tech sector firms accounted for 19 percent of all office space leased in South Florida, up from 11 percent in 2013.
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South Florida has much to offer tech companies of all sizes, from homegrown tech startups to massively funded unicorns from Silicon Valley, such as Uber and Airbnb, said Quinn Eddins, director of research and analytics for CBRE’s Americas Research division. “Those that have relocated or opened satellite offices in South Florida are largely attracted to the region’s global communications interconnectivity, strong economic and cultural ties to Latin America and multilingual talent pool,” he said in the report.
Much of the growth is coming from biotech firms. Offices leased in the biotech services and manufacturing sectors spiked tenfold in two years, from 15,400 square feet in 2013 to more than 181,000 square feet in 2015. Space leased in biotech went from 1 percent to 4 percent of the total leased office space in all sectors between 2013 and 2015.
Co-working spaces, often favored by tech workers, continued to flourish in 2015. In each of the past three years, co-working and executive shared-office work spaces have signed new leases totaling more than 100,000 square feet in South Florida.
New York-based WeWork leased 40,000 square feet off Lincoln Road for its first location and has two more spaces on the runway for this year and others in the plans. Pipeline Miami’s Workspaces expanded into Coral Gables and Doral, and Büro Group opened new locations in Miami’s MiMo district and Coconut Grove. Cambridge Innovation Center will be fully opening at the UM Life Science and Technology Park this fall.
Florida’s tech growth is “somewhat insulated” from contractions being felt in other markets, such as San Francisco, Austin, Chicago, San Diego and Denver, because 63 percent of the South Florida office space leased is by home-grown companies founded and headquartered in the region, CBRE said.
Still, the CBRE report also found that international firms, particularly those from Latin America, are also on the increase and account for about 15 percent of the tech sector leasing.
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