Doral's Office Market Seeing 'Unprecedented Rental Rate Growth'
Easily accessed by three major highways, the City of Doral has long been an ideal site for offices. In fact, the city says that 150,000 people per day come in just to work.
A residential boom over the past few years — the population rose by 26.1% from 2010 to 2016 — has also boosted the office sector. CREC Senior Vice President Doug Okun, who supervises leasing at Lennar Corporate Center, said there is a 91% occupancy rate in the city, and that space in a Class-A building can fetch $40/SF.
"You're looking at unprecedented rental rate growth in Doral," Okun said. "Twelve to 18 months ago, deals were in the mid-$30s."
CBRE's office market report from Q3 noted that tenants Sony Latin America, Caterpillar Latin America and Simply Healthcare all recently renewed or expanded leases for about 20K SF or more.
Okun said one of the things that offsets Doral is the parking ratio — three to five parking spaces per 1,000 SF of office space "at no additional cost," he said — but Doral's quick evolution as a live-work-play destination is also a factor.
Codina Partners alone has built 5,000 housing units in Doral this decade, and a slew of other developers have followed, in turn triggering entertainment and retail. Per the mayor's office, about 28% of the city's population is Venezuelan, including exiles who have fled Nicolas Maduro's regime.
"Five to seven years ago, to think that homes would sell for a million dollars out there would have been hard to believe," Okun said. "Now there's a more affluent demographic out there. Decision-makers live out there. It's becoming a first-class city, 24/7. Along with that comes traffic, so they want to stay close to home."
Okun predicted that rents would stabilize this year, though, because many buildings have traded hands, and buyers who paid top dollar are now, in turn, pushing rents.
"Vacancy rates will come down," Okun said. "Achieving that rental rate — in a lot of submarkets, some tenants feel pressure ... They're looking to move out, to sacrifice walkability, and go to the tertiary, suburban office market. I'm seeing more and more subleases. It seems that every week, I see more and more flyers from my broker friends handling subleases."
In the meantime, Doral Vice Mayor Ana Maria Rodriguez said that city officials are focused on solving the traffic woes that have come with growth. Lately, she and her fellow commissioners have been focused on what they call "completing the grid": connecting back roads to reduces pressure on the main arteries.
"We added seven or eight new streets in 2017 that were missing a little piece here and there," she said.
She said that people are also making use of mass transit, so much so that a trolley system, which connects to the Metrorail, is at full capacity.
"We have to add a new line every budget cycle," she said.
Ana Maria Rodriguez will be a featured speaker at Bisnow’s Jan. 17 event, The Rise of Doral, at the InterContinental Doral.
She will be joined by other panelists who are active in the city: Codina Partners Executive Chairman Armando Codina, Cherry Bekaert LLP principal Mark Giallonardo, Arquitectonica founding principal Bernardo Fort-Brescia, Century Homebuilders Group founder and President Sergio Pino, Jackson Health System President and CEO Carlos Migoya, Cushman & Wakefield Vice Chairman Brian Gale and Bilzin Sumberg partner Anthony De Yurre.