CBRE recently indicated in its report that the office leasing in South Florida by technology firms has doubled since 2013. According to the report, in 2015, firms in technology-related industries accounted for 848,000 square feet in new office leases, an 83 percent jump from 2014 — Magic Leap’s Plantation expansion, continued expansion of co-working companies, and a growth spike in biotech commercial leasing were main factor to fueling the latest trend.
“South Florida has much to offer tech companies of all sizes, from homegrown tech startups to massively funded unicorns from Silicon Valley, such as Uber and Airbnb,” stated Quinn Eddins, director of research and analytics for CBRE’s Americas Research division. “Those that have relocated or opened satellite offices in South Florida are largely attracted to the region’s global communications interconnectivity, strong economic and cultural ties to Latin America and multilingual talent pool,” he said in the CBRE report.
Available sublease space in 30 major tech markets is low but rising in North America, according to CBRE. In the past, sublease space oversupply has preceded a market downturn. Weakness has not yet emerged, but tech concentrated areas within certain markets should be closely monitored.
A majority of the tech sector leasing growth in Florida is from biotechnology firms. Offices leased in the manufacturing and biotech services sectors were up tenfold in two years, from 15,400 square feet in 2013 to over 181,000 square feet in 2015. Biotech space that was leased rose from 1 percent to 4 percent of the total leased office space in all sectors between 2013 and 2015.
Magic Leap, the technology startup backed by Google, accounts for 260,000 square feet of office space leasing of most of the former Motorola facility in Plantation.
In Florida, co-working spaces, continued to grow in 2015. In South Florida alone, for each of the past three years, executive shared-office work spaces and coworking work spaces have signed new leases which totaled more than 100,000 square feet.
Florida’s tech growth is “somewhat insulated” from contractions being felt in other markets, such as San Francisco, Austin, Chicago, San Diego and Denver, because 63 percent of the South Florida office space leased is by home-grown companies founded and headquartered in the region, CBRE also said.
Moderate economic growth is forecasted to continue this year with low interest rates, along with bouts of volatility and pessimism—the factors that have characterized the world economy for the past few years—are likely to continue in 2016, supporting moderate growth in commercial rents and investment sales volume globally. According to CBRE, Global consumer confidence improved slightly overall in Q1 2015.