Downtown Fort Lauderdale has been littered with cranes and construction over the past several years, but most or all of that was for multi-family developments. The recession brought new office construction to a grinding halt in 2008, and rental apartments have been the product of choice for developers for the last several years.
Since that time, only one office building over 30,000 s.f. has been built downtown: 1 West Las Olas. The lead developer of the project is also the managing partner of a law firm that occupies much of the building. I represented that attorney in finding the site where 1 West Las Olas sits. The building was planned as a home for his law firm, and as a premier property for tenants seeking downtown office space. The building is now full, and the owner’s risk-taking in erecting a new building during down market is to be admired
No other developer has taken that plunge, until now. Blackhawk Properties & Investments has announced that they will be breaking ground this summer on a 70,000 s.f. office building, less than one block from the Broward County Circuit Courthouse, on SE 6th Street & Andrews Avenue. The building will have a parking garage, and possibly retail on the first floor, with space for professional offices on the upper floors. This will most likely attract attorneys, given the proximity to the courthouse. But more importantly, it’s a strong sign of a recovery in the downtown office market.
Market fundamentals support this development. Vacancy rates in Downtown Fort Lauderdale have been steadily dropping since the 2nd quarter of 2012, and rents steadily rising since the 1st quarter of 2014.
For the past several years, multifamily developers have been paying exorbitant prices for land to develop apartments. But with development in that sector slowing, more land sites will be available to office developers.
I expect (and hope!) to see more office development downtown in the near future. With shrinking supply, and a strengthening economy pushing demand, developers will have to answer the call and put shovels into the ground.