From Miami to West Palm Beach, the South Florida region has always been a favorite of vacationers and retirees, but now corporate enterprise businesses are joining the fun.
Over the last couple years, the area has seen some of the largest population growth of any region in the US. More people have been permanently relocating to the area to set up new HQs, get involved in the tech scene, or even start their own high-growth companies.
The dynamic culture of the region and rise of remote work attracted workers from all over the country to explore a life in South Florida, and many are choosing to settle there with their families. More than 650,000 people moved to Miami at the height of the pandemic alone (Source). The rise of remote work for companies in other states has also allowed the economy to become less reliant on tourism than ever before (Source).
At this rate, South Florida is quickly transforming into a rich hub for high-growth and enterprise businesses to flourish, while many corporations are also setting up office locations to accommodate their worker’s location preferences.
South Florida’s office space crisis
The demand for residential space in the region has naturally led to a rise in demand for office space. Historically, the South Florida area has been a competitive, small market with limited capacity for office space. For instance, the greater Miami office market only has ~55.7M sq ft of office inventory (source) compared to the ~451M sq ft overall office space inventory in New York City (source).
“Currently the office inventory is extremely limited. While development for more of these buildings are underway, the area is still years away from experiencing the benefits of the construction boom. With current supply constraints and impossibly-tight vacancies of the existing office space, flex operators have been able to offer occupiers a solution to quickly gain access to a key market.” stated Matthew Cheezem, Vice Chairman at Cushman & Wakefield.
Premium office space with high-growth potential — the Industrious difference
In a tight market with limited options, established businesses are still craving the premium, amenitized office spaces of the cities their counterparts are able to enjoy.
“Our Brickell location has consistently had a waitlist since coming out of the pandemic, and our brand is recognized throughout the entire region. Industrious’ service-oriented office experience caters to the atmosphere and quality established companies are looking for but rarely find in South Florida.” —Peri Demestihas, Senior Director of Real Estate Growth.
The Industrious Brickell space, in partnership with the owner Parkway and KKR, speaks clearly to the aspirations of the business community. Our relentless focus on hospitality and member satisfaction allows Industrious to act as a tenant incubator for high-growth companies within a building. For instance, one enterprise member started out using this Miami space for their main office location and are now expanding within the building. These members are able to quickly get into their desired market through our space and then grow to fill their own larger office space within the building.
The sunny side of partnership agreements
Established, risk-averse landlords in a hot market have many options on whom to partner with to integrate flex into their portfolio. From family-owned local real estate firms to globally-recognized landlords, our partnership agreements provide a unique upside in the Miami economy. The steady rise of prices normally would force landlords to miss out on rent increases after locking a tenant into a traditional lease.
However, Industrious’ agreements provide an incredible opportunity for them to make even more on top of rent as the market demand increases (and the market shows no sign of slowing down).
At Industrious’ best performance, can make over 20% above inflated market rents. Our partnership agreement gives them the value of variability in our markets as rent grows, while not being forced to lock in a lease on traditional terms.
Bright flex office space opportunities in the sunshine state
In a hyper competitive market such as Miami, Fort Lauderdale, or West Palm Beach, strategic flex space within a building can act as an incubator for high-growth occupiers while also attracting established enterprises with premium amenities and a global network.
As businesses continue to set up new business hubs in the South Florida area, partnering with a premium flex operator not only provides a revenue upside for the landlord, but also draws in new, high-quality tenants to a building. In the 2023 pipeline, the best is yet to come for the sunshine state. With five open locations in the region by the end of 2022 and more in the 2023 pipeline, our team is excited to continue to bring our hospitality-focused office experience to South Florida.