Office Space Vacancies Spark Deals
February 12, 2010
By Darcie Lunsford

South Florida office space is on sale at levels not seen in a decade. ...

... “I think the outlook is that the recovery in South Florida is going to lag behind the national recovery,” said Steven Coutts, senior VP of national research at Studley, a tenant representation firm. “It is going to be a tenants’ market for some time – at least 12 to 24 months.”

How good the deals are typically depends on the amount of space, the length of the lease and tenant creditworthiness.

Studley’s data is finding these sorts of deals:

  • Downtown Miami: Tenants willing to sign a 10-year lease are getting, on average, 10 months of free rent and $35 a square foot for interior buildouts.
  • Downtown Fort Lauderdale: Free rent averages five months, with $30 a square foot in interior allowances on a seven-year lease.
  • West Palm Beach: Tenants can receive up to 12 months free for the same term with $35 a square foot in interior allowances. ...

... At the onset of 2008, he said, many of his building owners started cutting long-term lease deals with existing tenants as they sought rent breaks to ride out the rough economy. As a result, those owners don’t have a torrent of leases expiring this year, limiting their exposure to steep concessions.

“I think the general consensus is that we are not quite at the bottom,” he said. “I don’t think incentives are going anywhere quick.”

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