In a recent study, Miramar was indicated to be one of South Florida’s most desirable suburban locations, according to New Jersey-based corporate relocation firm Boyd Co. And I’m impressed with the significantly low operating costs that were presented within the study that I also believe gives us valid reasons to be optimistic that suburban office markets across America will continue to offer opportunities for commercial real estate development.
So in South Florida it was the Miramar area which had the 8th lowest annual operating cost in suburbia at $34.6 million, I read that the highest costs were found in Redwood City, California at $44.8 million while the lowest cost were in Estero, Texas at $33.5 million. And competing for such projects with very low operating costs for a significant operation like a 125,000 square feet office with 500 administrative employees in places like Florida are are very hard to break into.
So why is this information important for commercial real estate developers? I believe there are numerous reasons, and I’m just going to mention a few. Just from the perspective of Boyd Co., “Developers are realizing this trend and bringing urban environments to the suburbs and that is what happened with Miramar Town Center.” Boyd’s Principal John Boyd said, “The trend of companies moving into downtown markets across the country is overstated.” “While downtown office markets can help companies draw young workers and be near public transportation, many large companies still prefer suburban office environments for administrative operations because they’re desirable places to live – and less expensive.”
Traffic is another reason people consider suburban areas. Boyd said, “They can live and work and have cultural amenities without negatives like crime, traffic, parking and inflated cost structures.” And Boyd also noted that companies like Carnival Cruise Lines, CVS Caremark, Quest Diagnostics, Royal Caribbean Cruise, Spirit Airlines, and Elizabeth Arden have corporate offices in Miramar. And recently, United Data Technologies was awarded approval to build its headquarters building in Miramar.
And then there are of course — the low costs of labor. I mean, so just how affordable is it today to live in the suburbs while gas prices are currently on the rise? Boyd said Miramar has relatively low labor costs because South Florida’s population continues to rapidly expand, making the supply of clerical workers abundant and the foreign language skills and cultural diversity of the workforce are a benefit to these companies in connection to Latin America. It’s a known fact that utility costs and real estate occupancy presently — are relatively low. For example, in Miramar, a confidential company (South Florida Business Journal referenced to Ecolab) just applied for job growth incentives to open a Latin American headquarters in the area. “We identify Miramar as a premium submarket for office investment,” Boyd had said. “Companies very much want to associate themselves with pro-business states like Florida.” That’s really great news.
For all of you reading this, there is still going to always be competition in the space. I want you to be aware that competitively, the study also revealed the suburban markets which were less expensive for Miramar based companies — in many cities located throughout the United States, period. Cities like Canonsburg, Pennsylvania, Blue Ash, Ohio, Orchard Park, New York, South Park, North Carolina, Carmel Indiana, and Minden, Nevada. But price wise, we can take credit in South Florida that in Miramar, the suburb has more advantage than other cities when it comes down to warmer climate, international airport access, and foreign language proficiency. It’s time to let the big city competition such as Charlotte, Chicago, Atlanta, and Austin a run for their suburban commercial office space development, so I want all of you to continue to support the South Florida suburban areas and be proud that are numerous reasons it is business-friendly.