COVID-19 swept the nation in 2020 leaving markets disrupted. Real estate professionals were forced to adapt to a new reality. For Witko Group, it was a time to work closely with clients by engaging new marketing techniques, software and out-of-the-box thinking to produce the best outcomes.
The pandemic accelerated many real estate trends that emerged in recent years in both South Florida and the CRE industry as a whole. Check out Witko Group’s top predictions for commercial real estate in the year to come:
- Technology-related occupations will double in South Florida.
Miami office rental rates are on average about 52% less than San Francisco.
As the South Florida tech scene continues to grow, more companies will flock to South Florida for perks like tax incentives, office space cost savings, its innovative business community and beautiful weather.
The City of Miami is also offering incentives for businesses looking to relocate to the Magic City which will attract even more Silicon Valley businesses and investors.
- The hybrid workforce is here to stay.
COVID-19 forced traditional employers, who under normal circumstances are slow adapters of remote working options, to implement remote work as at least a part-time option. This is not a trend, but rather an expectation from the workforce. It is essential for businesses to value flexibility more than ever and most firms are open to this evolution.
According to CBRE’s Global Occupier Sentiment Survey, 70% of respondents indicated that some of their workforce can work remotely full-time; 61% of respondents indicated that all employees can work outside the office at least part-time.
- Demand for coworking spaces will increase.
The pandemic encouraged companies to embrace flexibility in the workplace, allowing employees more work-from-home options than ever. This will impact the demand for flexible satellite offices for companies to house employees In Miami’s ever-growing tech scene, more companies are continuing to lease coworking spaces. Coworking spaces offer the ability to work in a space that facilitates growth rather than locking a company into a lease or purchase.
- There will be an overwhelming demand for true Class-A office space as companies relocate from New York City and San Francisco.
Class A buildings are well located, modernly designed, highly amenitized and professionally managed. The demand for these spaces will be especially true in Miami Beach as hedge fund managers and venture capitalists relocate their out-of-state offices and will want to be in buildings of competing caliber to what they had in other states. Since office rents are significantly lower in South Florida than in New York or San Francisco, these new-to-market tenants will be willing to pay top-of-the-market rental rates for Class-A office spaces.