Why the force to bring workers to the office is a designer’s dream

The quality of an office space has become a key front in the war against remote working, and tenants and landlords are spending tens of millions of dollars to win the battle with stylish and irresistible workspaces.

It costs an average of $400 per SF to build out the interiors at 830 Brickell, the highly anticipated Miami office tower due for delivery next quarter, according to Brian Gale, vice president at Cushman & Wakefield, which is leasing space at the building. A standard office build cost $45 per SF.

It’s not just at the brand new tower — a tenant Gale worked with at 701 Brickell Ave. spent more than $600 per SF to finish his space, he said Thursday at BisnowThe South Florida Office and Workplace Summit was held in that building.

Bisnow/Matt Wasielewski

Stefana Simic of AEI Spaces, Brian Gale of Cushman & Wakefield, Charles Russo of Nuveen Real Estate, Gigi Alvarez of G Alvarez Studio and Anthony Iandoli of JRM at Bisnow’s South Florida Office and Workplace Summit Thursday.

Firms are pushing the boundaries of what office space looks like, in the process, giving a boost to an entire ecosystem, from architects to furniture makers.

“The flight to quality is very real. (Tenants) will literally pay almost anything to get what they want,” Gale said. “The evolution of the office world, it’s like the hotel market and the apartment market combined, because you’re trying to get people out of their homes back into their offices.”

The demand for quality spaces extends beyond the interiors to the physical structure, pushing developers to change their design standards to attract enough pre-leasing to get off the ground.

Expensive features that were once considered unnecessary are embraced as a differentiator, a marketing tool that changes the way a potential tenant views a property.

“These ideas of integrating biophilic design, having more flexible living, these are not new ideas,” said Stefana Simic, a partner at AEI Spaces, an architecture and design firm based in Miami. “Architects and designers have been proposing these ideas for decades, but they’ve always been designed around value.

“These companies are now investing in premium real estate with amenities they didn’t consider before,” she added. “It’s a survival strategy.”

The strategy is not only aimed at large corporations. Dozens of deep-pocketed executives who flocked to Miami during the pandemic want to live near their office and work in spaces that align with their vision of why they left places like New York and Chicago for Florida.

The C-suite also got a taste for working from home during the lockdowns, and now they’re asking for comparable spaces to return to, Gale said.

“They’re sitting in their nice homes and they don’t want to come to the office,” said Gale, one of Miami’s leading office brokers. “They won’t go back to stock, low ceilings, little window space. They just aren’t.”

What the demand for magnetic spaces translates into in practice is the range of features. Rooftop gardens, outdoor green spaces, tenant lounges and first-floor restaurants are popular, but golf simulators, pet daycares and an organized and rotating collection of expensive art on display are not uncommon.

In a post-pandemic world, connection and health are emphasized.

“Wellness-oriented things, things that are experiential and allow for larger gatherings are helpful,” said Charles Russo, Southeast Regional Head of Workplace at Nuveen Real Estate. “Also, that kind of Instagrammable moment feature where your project is always in the mix in some way.”

Russo cited Southeast Asian hotspot Komodo at 801 Brickell as the type of amenity that can keep a building front of mind. Nuveen sold the property in October for $250 million, the most expensive single-office asset to trade in Miami last year.

Bisnow/Matt Wasielewski

WeWork’s Nicholas DeMarinis, Mindspace’s Gianni Piccoletti, Deco Capital’s Bradley Colmer, Urban-X Group’s Andrew Hellinger, and Life Time Work’s Molly Walsh discuss how office space is changing to attract tenants.

Property owners in trendy neighborhoods like Miami Beach can lean into their surroundings to add cachet to their projects by leveraging nearby businesses as an extension of their amenities. In less popular areas, owners must focus on landscaping instead.

The latter route is the one Andrew Hellinger, co-principal of Urban-X Group, had to take to position Miami River Landing Shops & Residences, a 2.2 million SF property with 800 feet of riverfront access, 528 apartments and 346 SF of retail. space-bar.

When the project began in 2011, an AMC movie theater was slated for the top three floors, but Urban-X opted instead for 118,000 SF of office space as the theater chain’s stock sank and its future looked unclear.

The shops and apartments at Miami River Landing were 97 percent leased in March, but Urban-X is still looking for a tenant to take the office space.

Urban-X continued to invest in upgrading the riverfront and access to a diverse retail mix for a potential tenant. But Hellinger said River Landing’s nearly 40,000 SF of floor slabs, which were difficult to break into smaller pieces, are difficult to lease in today’s market. More than half of Miami’s leasing activity in 2023 was for deals under 10,000 SF, according to Avison Young.

“We struggled, honestly, because we were told we were in the middle,” he said. “We’re between Brickell and Wynwood, we’re between Biscayne and Blue Lagoon and Doral. I hope that enough people will visit us as a destination where a broker will say, “Wow, what a lifestyle you’ve created for an employer and employees.”

In Miami Beach, Deco Capital capitalized on the neighborhood’s inherent strengths to bring Eighteen Sunset’s 60,000 SF of office space to 80% leased ahead of its delivery next quarter.

Eighteen Sunset at 1752 Bay Road also includes 17K SF of ground floor restaurant space and a rooftop pool deck, where luxury watch brand Audemars Piguet has signed on to open a 12K SF retail lounge.

The pool has become a selling point for tenants, Deco CEO Bradley Colmer said. Tenants already pay a premium to be surrounded by retail and water in Miami Beach, so Deco is focused on designing a plan for the property that activates the rooftop space, giving tenants a plush space to hold meetings.

The project was originally slated to be apartments, but Colmer said the pivot to office while keeping much of the same amenity package helped Deco find tenants and push up rates.

“The fact that we kept the residential amenities of our office building was something that helped us achieve probably the highest net effective rents on the East Coast of the United States south of New York City,” he said. “We’re pretty happy with that.”