Don’t count on new office construction happening in Miami’s urban core anytime soon.
Greater Downtown Miami might not see another office development until early next decade, JLL managing director Jeff Morris said during Friday’s panel discussion hosted by the Commercial Industrial Association of South Florida (CIASF).
Morris, Crocker Partners vice president John Osborne, Suffolk Construction vice president Rick Kolb and ADD Inc. principal Jonathan Cardello addressed numerous industry trends at the event, which was held inside office tower Brickell World Plaza, one of the most recent additions to Miami’s financial district. Foram Group completed the 600 Brickell Avenue building in 2011.
Brickell World Plaza could end up as one of the last office buildings “ever” constructed on Brickell Avenue, Morris said. “In order to see [new] office projects you’ll need a residential market that is in contraction or stagnancy for a long period of time,” he said. Once that happens, downtown Miami and the neighborhood west of Brickell Avenue are the most likely areas for office construction, according to Morris.
Osborne, whose Crocker Partners owns more office square footage in Greater Downtown than any other landlord, cited today’s emphasis on residential development, rising construction costs and increased land prices as key reasons for the lack of office construction. He predicted the area won’t have new office construction for at least three or four years. “There’s a push for new multifamily development, which is taking up the great sites,” he said.
Kolb, the lone construction executive on the panel, expanded on Osborne’s observation that material costs are on the rise, especially for concrete and glass. But the biggest issue for the local construction industry is finding labor. After the market crashed last decade, “a lot of labor disappeared and never came back,” Kolb said. “There are local contractors with good forces, but the bigger subcontractors sometimes have issues getting more labor.”
Source: The Real Deal
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