Wynwood commercial real estate continues to grow as many large tech companies, financial institutions and top food and beverage concepts continue to choose this desired neighborhood as their headquarters.
Over the past three to four years, Wynwood has been thriving thanks to vertical growth, said Randy Carballo, senior vice president of the CBRE Miami office. With the wide variety of residential offerings now in Wynwood, corporations are competing to stay afloat in this submarket.
“Fare levels have risen significantly, well north of 20%,” said Mr. Carballo. “The office product in Wynwood, a few years ago, was remodeled warehouses and small projects. Now, you have the real Class A product, where the cost of construction and land has increased rental rates.”
In the Wynwood-Design District submarket, the average asking rate per square foot for a Class A office space is $78.35 for a Class A office space and $67 for a Class B, according to the Miami Office Market 3Q 2022 report from a Blanca licensed real estate broker.
The vacancy rate has declined since the highest point in the third quarter of 2020, from 53.5% for Class A office space to 27.7% in the third quarter of this year.
The weighted average asking rate increased by 22.4% year-on-year, direct vacancy also decreased by 37.5% compared to the same period last year. There has been a net absorption of 212,316 sq ft – the change in occupied space, with vacant space and newly constructed space, measured between this year and last year. As Blanca reports, 252,428 square feet of offices are under construction in the quarter, and a total of 320,904 square feet of space has been leased.
Some new-to-market tenants include Notchelle, a 38,400-square-foot lease in Wyncatcher; 30,000 square feet leased at Mindspace, The Gateway at Wynwood; and leased 4,100 square feet of space at The Chef’s Warehouse, 545 Wyn.
About 1 million square feet of new development is going online, Mr. Carballo said. “Our team is representing LYNQ in Wynwood, which is approximately 330,000 square feet of brand-new trophy office space on Fifth Avenue. And so, you can see an influx of high-quality office space into this marketplace for those users. continuing to look, looking for different offerings, but also large blocks of space that don’t really exist [overall] Market.”
According to the Colliers Miami-Dade County Office 22Q3 report, there are 40 office space buildings in Wynwood and the Design District and a total inventory of 1,955,890 square feet.
The Colliers Retail report for the third quarter shows inventory of 2,795,620 square feet for retail space and total vacancy of 7.3%, net absorption of 9,010 square feet, 15,000 square feet of under-construction space and an average asking rate of $69.40 per square foot . ,
Growth in multi-family developments in Wynwood is opening up the area’s retail and office submarkets to a live-work-play environment. “In a couple of years, we will be north of 5,000 residential units in Wynwood,” said Mr. Carballo. “This is saying a lot, because two years ago we had less than 500 residential units. So, the neighborhood is growing tenfold, and with it comes new retail offerings, new food and beverage opportunities, new services in the neighborhood. Couple that with the future prospects of Brightline Station coming soon… Wynwood has a long, long way to go, and it’s actually one of the more exciting neighborhoods than South Florida.
In an October report prepared by Related ISG Realty with data from Costar, the top retail leases in the Wynwood-Design District area last year included 2610 N Miami Ave., leased by Metro 1 Commercial; 3711 NE 2nd Avenue, for Eichholtz Furniture, leased by DWNTWN Realty Advisors; and 3800 NE Miami CT, leased by Cushman & Wakefield.
The same report estimates the average asking rent for retail in Wynwood at $61.69, up 12.4% from last year.
Additionally, the local branch of the global non-profit organization Endeavor Miami, which supports entrepreneurs with the help of the John S. and James L. Knight Foundation, moved its Coral Gables office to Wynwood, a “strategic approach” for the organization. location”. Claudia Duran, Managing Director said. The new office is 3,000 square feet.
Gateway in Wynwood, which has 24,041 square feet of flexible retail space and a total of 183,990 square feet of Class A office space, announced in May that it is leasing about 26,000 square feet to tech start-up OpenStore. In the same building, Baseline, an investment company, will lease 5,000 square feet of offices. Asian-Fusion Steakhouse Daliyah and Mizu Rooftop Garden are leasing 6,000 square feet of ground floor space and 3,000 square feet of rooftop area, respectively.
The company announced in March that Marcus & Millichap had leased 12,029 square feet on the seventh floor, from The Waterford Business District near Miami International Airport to its Miami office leasing 12,029 square feet on the seventh floor. Venture capital company Funders Fund has also leased 14,914 square feet on the 10th floor of the building, and Veru, a biopharmaceutical company, has also leased 12,155 square feet of office, according to Business Journal.
According to Commercial Observer, PricewaterhouseCoopers, better known as PwC, also struck a 38,409-square-foot deal in a 545 Wyn office building; and Schoenfeld Strategic Advisors has leased 20,000 square feet of space at The Dorsey, a mixed-use development in Wynwood.
Other companies that have recently moved into the neighborhood include Spotify Technology, Blockchain.com, Live Nation, Chase Bank and Spearmint Energy, a renewable energy company.
“The market wasn’t really an office market, just three or four years ago, with a mostly repurposed warehouse serving to create an emerging niche for one of the most exciting and dynamic markets in South Florida,” Kevin said. . Gonzalez is the Senior Managing Director of Colliers Team Kingsley-Ruchik. “Just in the last 18 months, we’ve seen almost half a million square feet of absorption through new companies taking place in the area.”
Experts agree that emerging housing developments in Wynwood are contributing to the density of commercial real estate in the area. “So, you’re going to see more and more service-oriented retailers that need to serve those customers,” said Drew Shawl, executive vice president of advisory and transaction services at CBRE. “There are some retailers that serve a day’s population, and then there’s a group of retailers who not only [service] the population of the day, but also the residential population who call Wynwood home.”