‘Cautious Optimism': Businesses Attracted to Broward's Development Opportunities, Class A Office Space
Fort Lauderdale is evolving as a talent and employment hub as businesses are lured to the area seeking high-quality office space.
That's according to a Working in Downtown Fort Lauderdale Office Market Report by Fort Lauderdale Downtown Development Authority (DDA) and Colliers, which says employers are attracted to the growing residential density and educated talent pool which can help support and grow new sectors and growing industries.
The population in Fort Lauderdale has increased by 80% since 2010, with 58% of residents having a bachelor’s degree or higher, the report says. About 35% of residents in Broward County have a bachelor’s degree or higher.
The area gained an estimated 6,000 new residents during the pandemic, which shifted the demographic towards young professionals and families.
According to Zach Talbot, a principal at Cresa South Florida, there have been many transactions across Broward County, particularly in the legal, tech, steel, healthcare, biomedical science, automotive and hospitality industries. The report says legal and professional industries have seen the most year-over-year growth in Fort Lauderdale.
Talbot has assisted companies that were either relocating, expanding, renewing, or adjusting their office space. Downtown Fort Lauderdale has an affordable class A office market at $50.92 per square foot.
“Generally cost of living, labor and office rent is lower in Broward County. These items impact the bottom line. The major advantage Broward County has is its central location between Miami and Palm Beach. Companies can attract labor from both neighboring counties,” Talbot said.
The pandemic changed how companies think about work. That shift allowed older buildings to undergo upgrades to compete with Class A spaces to remain attractive to tenants and traditional office spaces to offer amenities similar to co-working operators and new residential buildings.
A good choice for law firms?
For law firms, the downtown Fort Lauderdale corridor, with its access to courthouses and also restaurants, shopping centers and entertainment, offers attractive factors that can bring in or keep talent.
That's according to Andrew Blasi, a founding shareholder of Shapiro, Blasi, Wasserman & Herman in Boca Raton who says the objectives for firms is to incorporate aspects into the physical workspace that remote work can't offer lawyers.
“These include lounges, terraces, eating areas and other spaces which foster more socialization and collaboration,” Blasi said. “Access to the international airport aside, which might bode in favor of a downtown location, the Plantation/Sawgrass submarket and the Cypress Creek submarket also offer attractive alternatives to firms looking to focus more on an easier commute for its staff, as well as having closer access to more affordable housing markets.”
As Blasi sees it, law firms need to prioritize certain amenities and lifestyles for their employees.
“A good work-life balance, an easy commute (often involving flexible hours) and an accommodative work environment which satisfies the above criteria and promotes interaction among the professional staff will be as important going forward as offering a competitive salary and benefits,” he said.
Not so Fast
Although there's still a lot of hype around opportunities in South Florida's office and industrial real estate sector, the commercial real estate landscape is directly tied to the larger economy.
Talbot says that means Broward County is in a state of “cautious optimism”.
“The capital markets are very slow with trophy office assets that go on the market only to be taken off in a couple of months later because of the turbulence in the debt markets. Leasing activity remains strong for now,” Talbot said.
“History would tell us that we should be going into a tenant’s market with leasing slowing down, but we were very confident that would happen after COVID, and it seemingly went the other way.”
Opportunities for ‘Smart and Thoughtful Development’
As 30% of people who work in downtown Fort Lauderdale live between 10 and 30 miles away, there are very few undeveloped swaths of land left in Broward County that can be used as the demand for space grows.
“Parkland remains the area still likely to see the most development activity to come as the last few remaining large development sites and the surrounding lands get completely built out,” Blasi said.
Noah Breakstone, the CEO of BTI Partners, said that until recently developers overlooked opportunities in downtown Hollywood, which is a good central location for employees coming from Miami-Dade or Fort Lauderdale.
“We have had our eye on Hollywood's Young Circle for a while because of its walkability, access to the beaches, downtown Fort Lauderdale and downtown Miami, and proximity to Fort Lauderdale Airport and Port Everglades, home to the world's largest cruise lines,” Breakstone said. “Smart and thoughtful development will further help residents and visitors experience all of the amazing things that Hollywood has to offer.”
BTI Partners is planning two mixed-use developments along Young Circle to re-energize the area and a 10-acre ArtsPark to bring restaurants, retail, office, residential uses and entertainment.
“The area's proximity to large employment centers has fueled demand for market rate housing and amenity-rich urban core developments, like ours,” Breakstone said. “We're seeing many cities turn to large-scale, mixed-use developments to ignite new growth and urban renewal. Downtown Hollywood is prime for this growth, and we are excited to be part of its continued revitalization.”
Going forward, as new office developments come into the horizon, the vacancy rate in Fort Lauderdale is expected to remain stable as the influx of companies continues.
This article originally appeared in a print issue of the Daily Business Review.