Pricey Brickell office rents push six firms to cheaper digs in downtown Miami tower
A downtown Miami office tower has reaped the benefits of Brickell’s sky-high rents, signing six new tenants — and five more coming — to move into a coveted commercial building next to Bayfront Park.
Six local and outside firms recently leased space at Citigroup Center at 201 S. Biscayne Blvd., said Brett Reese, the managing director for real estate investment and management firm CP Group, co-owner of the tower.
Formerly known as Miami Center, the 34-story building will now be the base for management consulting company Resource Systems Group Inc., public relations firm Max Borges Agency, Plus International Bank, private banking firms Andbanc and Banco General, and Olio, creator of a food-sharing application. The companies will move into the tower sometime this year.
With the exceptions of Resource and Olio, the new tenants come from Brickell, escaping the escalating commercial rents there propped up by company expansions and corporate migrations into the area. Tenants find that downtown Miami still gives them proximity to Miami’s financial district while being in the heart of the urban core, also a rapidly transforming area.
The downtown Miami appeal has helped boost leasing activity at Citigroup Center, Reese said. The building now is at roughly 75% occupancy, higher than the 65% level in late 2021. And lease deals are in the works with two more unidentified firms from Brickell, another two domestic newcomers to South Florida and a Canadian restaurant group signing on for the ground floor.
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“Tenants are seeking environments that are top environments for their life. Buildings that have been renovated and provide that experience will benefit from that leasing momentum,” said Tere Blanca, CEO of Blanca Commercial Real Estate.
“Citigroup Center is the premier asset in downtown. They have Goldman Sachs, expansions in the building by Citadel, Morgan Stanley consolidated three offices. Citigroup Center is a top contender to capture these companies, because the building has been renovated and it has the amenities tenants are seeking.”
Downtown Miami offers renovated or new space with amenities at cheaper rents than the nearby inventory in Brickell. Citigroup Center, for example, has a 9,000-square-foot conference room, gym, car wash and concierge service.
Downtown Miami’s office market commands an average rent of $60 a square foot, lower than Brickell’s $89 a square foot — and rents for top-shelf office space in Brickell have gone up to $150 a square foot. Options are also especially limited in the financial industry hub, according to Blanca Commercial Real Estate’s fourth quarter office market report. It has an 8% vacancy rate among 13 office buildings with a combined 4.75 million square feet. Downtown Miami, by comparison, has a 23% vacancy rate among its eight office buildings with 4.89 million square feet.
“Downtown still provides some of the great restaurants in town, ease of access, public transportation,” Reese said, “and at a price point that’s substantially attractive.”
Also, downtown Miami continues to evolve. Developers are redeveloping existing buildings and empty lots to make room for new offices, residential buildings and retailers and restaurants.
