July 19, 2022 – Office Developers Flock to Miami Beach, Creating a New Skyline by the Ocean
By Deborah Acosta. Read the original article here.
Executives, investors and companies moved to the area during the pandemic. Now they are seeking and building office space nearby.
At least eight office buildings are in various stages of development in Miami Beach, the most construction of
high-end office properties there in 20 years
Miami Beach, long the waterfront playground for those who work in Miami proper, is emerging as a thriving business center in its own right.
An influx of executives, investors and companies moved their residences and firms to Miami Beach shortly before or during the pandemic for the lifestyle and lower taxes. The newcomers who are seeking and building office space include former Google Chief Executive Eric Schmidt, Starwood Capital Group CEO Barry Sternlicht and Wayne Boich, the CEO of Boich Cos. a family office.
The relocation of so many firms to Miami Beach is generating demand for new office buildings within walking distance of their executives’ waterfront homes, offering a more pleasant commute than fighting rush-hour traffic to reach Miami’s financial district.
At least eight office buildings, with over 1 million square feet, are in various stages of development. That is the most construction of high-end office properties in 20 years, according to Lyle Stern, the president of the Lincoln Road Business Improvement District, whose members include Miami Beach property owners and businesses.
One of the projects is the new headquarters of Starwood, which had been based in Greenwich, Conn. Clad in glass, the 145,000-square-foot building has wraparound outdoor terraces and cascading green plants.
Mr. Boich is near finishing up a new office building for his firm in Miami Beach’s Sunset Harbour neighborhood, a five-minute drive from his waterfront mansion. When he saw prices for land skyrocket in the area, he bought the adjoining lot as well.
Mr. Boich predicted strong office demand will continue given the growing popularity of Miami Beach as a place to live and work. “If people keep moving the way they are, I think they can all be successful,” he said.
Starwood Capital Group moved its headquarters from Connecticut to Miami Beach.
Miami Beach had about 850,000-square-feet of high-end office buildings before the current building boom, compared with about 10 million square feet in the City of Miami. Most Miami Beach office buildings rise no more than six stories, because of the city’s zoning regulations.
The rent for top-quality office space in Miami Beach is going for $81 a square foot compared with $86 in Miami’s Brickell financial district, according to a report released this month by commercial real-estate firm JLL.
“We have to harness the interest that’s coming to our city right now,” said Miami Beach Mayor Dan Gelber. “If you want to be a live, work, play community, you have to have the work part, and right now we’re a little more play, play, play.”
To help lure office projects, Miami Beach is offering a financial incentive to tenants in the form of a subsidy of as much as $60,000 a year for the next four years. Other incentives include an expedited permitting process for office projects, and offering additional parking spots, according to Ricky Arriola, one of five members of the Miami Beach Commission.
These incentives are helping lure investors such as the former Google CEO and his wife, Wendy Schmidt, who own a majority interest in a Miami Beach office project being planned by New York City developer, Sumaida + Khurana. Meanwhile, Related Group and its CEO, Jorge Pérez, are planning a 160,000-square-foot building with its own yacht marina.
But some are concerned that office development might change the character of the city, which is known primarily for its hotels and beaches. Kristen Rosen Gonzalez, another commission member, said she is opposed to a plan sponsored by Mr. Arriola to allow office development on three city-owned parking lots.
“We need traffic studies and traffic solutions before we overbuild our island. Once we build it, we can’t go back,” Ms. Gonzalez said.
The plan is scheduled to go before the commission next week. If it is approved, it would be on the ballot for city voters in November.