Offices near Lincoln Road? That’s what Miami Beach has in mind
With tourism in the doldrums, Miami Beach is seeking to diversify its economy. The plan: a business district near Lincoln Road that can bring more companies, offices and workers.
City of Miami Beach commissioners are looking to develop three sites located between Lincoln Road and 17th Street, within walking distance of Regal Cinemas South Beach, Colony Theater, and City Hall. They include the northeast corner of 17th Street and Lenox Avenue, the middle section of a block between Lenox and Michigan avenues, and the middle of a block between Jefferson and Meridian avenues. All are now covered by parking lots. According to the city’s solicitation on BidSync. Each project could rise up to 80 feet.
Commissioners are first seeking letters of interest, which they will review in January. They will then call for proposals. Commissioners hope to add a total of 383,439 square feet of new office space through the initiative. The city would enter into a 99-year lease with the developer. The developer would then build the project and manage it.
Commissioners discussed adding office space last year after Zika and hurricanes wounded Miami Beach’s economy, said Commissioner Ricky Arriola. Covid-19 convinced them.
“A lot of people are buying their homes on Fisher Island, Star Island, Sunset Islands. A lot of them want to have their offices near where they live,” Arriola said. “This is a once in a lifetime opportunity. Once we get them, we can get them for the long term and can diversify our economy.”
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The Lincoln Road Business Improvement District has been boosting business by encouraging pop-ups and redevelopment of its streetscape. But little has changed in the area’s office market.
While Miami Beach has a total office vacancy rate of almost 14%, according to the JLL Office Insight third quarter 2020 report, direct asking rents increased by almost 11% between 2019 and 2020, from $42.62 per square foot.
Currently, that area has only about 500,000 square feet, about a quarter of the total Miami Beach office space, is on or near the main pedestrian thoroughfare of Lincoln Road, according to Lyle Stern, president of commercial real estate specialists Koniver Stern.
All of it is nearly 20 years old or older, said Steven Hurwitz, JLL managing director.
“When you look at new supply,” Hurwitz said. “There is always a question for how deep is the demand. It’s a question of timing. The market can use a cluster of Class A, amenity-based space. That will elevate the existing space.”
Population growth is fueling some of the demand, Hurwitz said. “More people are moving down here. They are coming across all of Miami-Dade. That is going to continue.” The uncertainty that stalled business early in the pandemic has subsided, bringing new companies including Blackstone and Icahn Enterprises to the region.
A range of industries are drawn to Lincoln Road — financial services, family offices, creative companies, including modeling agencies and music studios, typically seeking 1,500 to 4,000 square feet of space, Hurwitz said. Proximity to the beach is a lure.
Stern, who lives and works in Miami Beach, also sees more people like him who want an office near home. “You can walk out of your office at 5 p.m. and go see the New World Symphony. I want to be able to leave my office and be on my boat in five minutes. It’s a lifestyle choice.”
This story was originally published November 16, 2020 at 7:00 AM.
