Colliers VP on How Coral Gables Is Cementing Its Status as a Top Office Market

November 21, 2024

Executive Insights Brokerage Miami OfficeMoreSoutheast

What’s next in the city's growth as a premier South Florida business hub? Tom Farmer weighs in.

With its blend of suburban tranquility, urban connectivity and diverse amenities, Coral Gables is steadily strengthening its status as one of South Florida’s most desirable office markets. Vacancy rates were below 10 percent last month and demand for prime office space is rising—according to Colliers data—making Coral Gables a magnet for businesses seeking modern, well-connected work environments for their employees.

Colliers South Florida’s Vice President Tom Farmer — Tenants seek vibrant office spaces that reflect their brand and attract talent, and Coral Gables has met this need in recent years, according to Farmer. *Image courtesy of Colliers South Florida*

Most recently, Bayview Asset Management renewed its 55,071-square-foot lease at the Office at Merrick Park, a Class A office space located at 4425 Ponce de Leon Blvd. Colliers Vice Chair Stephen Rutchik and Vice President Tom Farmer represented landlord Brookfield Properties, while Matthew Cheezem of Cushman & Wakefield worked on behalf of the tenant.

This lease renewal—one of South Florida’s largest office deals this year—highlights Coral Gables’ competitive edge against other markets in the region. Commercial Property Executive asked Farmer to talk about trends shaping Coral Gables’ growth as a premier business destination in South Florida.

How has Coral Gables grown into such a sought-after submarket? What has led to its competitive standing?

Farmer: Coral Gables has historically been a premier suburban office market, due to its location within easy reach of all of Miami-Dade County and defined by Mediterranean architecture, and its stellar demographics. In recent years, rent appreciation and constrained supply in the Miami CBD has caused office tenants to look further afield, and Coral Gables has reaped the benefits—maturing into a strong, stable market.

Is there a particular sector or tenant type showing increased interest in the area?

Farmer: Tenants are looking for exciting spaces in office buildings that reflect their image to clients and help them to attract and retain talent. Coral Gables has delivered that in recent years. Many sectors, including financial service firms, law firms, coworking operators, biomedical research, travel and tourism, and tech firms have established new locations in Coral Gables.

After securing a lease renewal for almost half of the space at Merrick Park, Brookfield Properties now intends to begin capital improvements at the building. What impact do you expect these renovations to have?

Farmer: Brookfield Properties, who have owned Merrick Park since 2018, decided it was time to invest in the asset, with the focus on overall tenant experience, after analyzing the competing properties and feedback from prospects and existing tenants. The capital improvements are focused on visitor sense of arrival which begins in the parking garage, extend through the ground-floor lobby, and to the office elevators. The renovations are set to begin in November and should be completed by the third quarter of 2025.

The Office at Merrick Park features 126,021 square feet of Class A office space across five floors. *Image courtesy of Colliers*

Besides the building’s fresh look after the renovation, what else will be making it stand out among competitors in the market?

Farmer: The Offices at Merrick Park offers unique advantages, relative to the competitive set in Coral Gables. As traffic around Alhambra Circle becomes more congested, Offices at Merrick Park offers a much easier commute for tenants and visitors from Coral Gables, Pinecrest or South Miami neighborhoods. Additionally, it has an above-market parking ratio of 4:1,000 square feet, and it’s connected to the adjacent Shops at Merrick Park Mall, offering access to all the amenities and food and beverage options the mall offers.

To what extent do such improvements matter in attracting high-profile tenants considering the ongoing trend toward hybrid and remote work?

Farmer: Ownership groups, such as Brookfield Property Group, have made deliberate efforts to improve their assets to make them more attractive to office users which, in turn, has made it easier for employers to not only bring employees back to the office but also attract new talent. Several have made the decision to update lobbies and common areas.

Other capital improvements such as the addition of fitness centers and conference facilities, which are generally free of charge for tenant usage, have also been very impactful. Many landlords have also made the decision to take existing vacancies and create move-in-ready spec office spaces with upgraded finishes to meet tenant demands. The Offices at Merrick Park offers shorter commute times to and from many Miami suburbs, which supports hybrid work particularly well.

Planned improvements at Merrick Park include parking garage upgrades. *Image courtesy of Colliers*

Speaking of Miami suburbs, what attributes set Coral Gables apart from other high-demand business areas in South Florida?

Farmer: Coral Gables is centrally located within the county and offers an outstanding quality of life, with some of the best schools in the nation, cultural amenities, upscale retail and dining options that support tenants’ decisions to office away from the CBD, with the added advantage of lower office rental rates.

Home to the University of Miami—a private research university and academic health system—Coral Gables offers a highly skilled workforce, in which more than half of residents are fluent in another language and nearly 70 percent hold a bachelor’s degree and 25 percent have graduate or professional degrees—about three times the Miami-Dade County average.

How do you see office space offerings in this submarket evolving over the next few years?

Farmer: Our expectation is that ownership groups will continue to invest in their assets, improving them aesthetically as well as adding amenities to capture activity from both relocating and new-to-market tenant users. We also expect landlords to continue the trend of having robust spec suite programs.

Landlords will continue to engage with architectural design firms to stay ahead of emerging trends to create move-in ready office spaces that meet the demands of the market. The introduction of Agave Holdings’ The Plaza Coral Gables as well as the 4225 Ponce from Constellation Group and The Boschetti Group—currently under construction—have raised the bar in Coral Gables in terms of office product quality and tenant experience. Existing office landlords have taken note and are making the necessary improvements to stay attractive and relevant.