For law firms, office location is critical. Several factors determine where a firm will lease or purchase an office – building image, surrounding amenities, and traffic and commute time for employees. Many other considerations come into play, but for firms with a significant litigation practice, close proximity to the county circuit court can be critical. When “time is money,” litigators, court reporters, forensic accountants, and all of their supporting vendors need to get to and from the courthouse quickly and easily.
With that in mind, Berger Commercial Realty has created a Courthouse District Office Market Report, focusing on office buildings (existing, under construction, and under renovation) within a one-mile radius from each of the three county circuit courthouses – Broward, Miami-Dade and Palm Beach. Our report gives an overall indication of market conditions. Are we in a landlord-friendly market? A tenant-friendly market? A turning point between the two? There are many other variables to consider and we could not cover them all. But this overview can get you started with your analysis. If you’re considering a new office, renewal, expansion, or contraction, it’s always best to consult with a commercial real estate broker with local market knowledge and a track record of successfully representing office tenants.
Vacancy rates are rising across the board, but rents are still rising. If vacancy rates continue to climb, expect rents to fall. Currently, Broward County’s Courthouse District is seeing rising vacancy rates, mainly due to new construction of 357,000 s.f. of Class A office space. Before that broke ground, the overall rate was 12.7%, but quickly rose to 16.5%. Class A vacancy is at 21.2% and gives tenants an advantage until the new space is absorbed; while Class B (4.4%) and Class C (10.5%) stay in healthy, landlord-friendly territory. The Miami-Dade Courthouse District is slightly less favorable for tenants with overall vacancy at 15.3%, also reflecting new construction of 552,000 s.f. Class A space is at 18.8% vacancy, Class B at 13.7%, and Class C at a shockingly low 1.1%. Palm Beach County’s Courthouse District has the lowest overall vacancy at 14.7% (no new construction), slightly in the tenants’ favor. Class A space in the Palm Beach district is at 12.7%, Class B and C are each at 17.3% – there are excellent deals to be had for good-credit tenants in Class B and C properties.
Note that some buildings within an asset class or county may be outperforming or underperforming the rest of the market, and buildings (and portfolios) must be reviewed on a case-by-case basis when negotiating, to assess your bargaining power and obtain all that you should in your lease. Why consider our help? Michael Feuerman, Esq., SIOR, CCIM is an office tenant representation specialist, with over 19 years in the brokerage business, over $272 million in completed transactions, six years of experience as a business litigation attorney before becoming a broker, and long-term relationships with area brokers and landlords. Michael and his team can bring their knowledge and experience to your team. We take the burden off of you in analyzing the market, save you time in locating the right property, and negotiating highly favorable terms for your lease or purchase. Landlords pay our brokerage fee, so there is no cost to you. Please call us with any questions regarding this report or your own requirement, and we’ll be happy to answer any questions you may have.