Excerpted from The Real Deal Miami.
However, Justin Berryman, director of Franklin Street’s Miami office, said landlords seeking higher rents don’t think the South Florida market is going to cool off.
“They believe they can get more because rent prices keep climbing,” Berryman said. “[But] there is a limited pool of higher-end tenants that can pay those higher rates. Landlords think there is a greater pool.”
He said landlords are willing to ease up on their asking prices if they have confidence a prospective tenant has the financial wherewithal to occupy a space in the long term, as well as the ability to drive traffic to other tenants. “Those are significant factors in negotiations,” Berryman said.
He usually advises landlords to consider lowering their expectations, because even if a tenant agrees to their asking price, it may not be sustainable. “You can get them to pay it, but will they still be there in two or three years paying a high rent? If the answer is no, then the landlord is back to square one, and they may not be able to get the next tenant to pay that high rate,” he said.
Still, there are pockets in South Beach, Brickell and downtown Fort Lauderdale where Berryman said landlords can demand the high rates because foot traffic remains strong.
And he said new shopping destinations like Brickell City Centre can ask for higher rents than the going market rates in the Brickell neighborhood, which hit $61.23 a square foot, according to the Colliers Q3 2017 report. “It’s a place that keeps people there, and consumer traffic is around the clock,” Berryman said. “Those are some reasons why Brickell City Centre can demand higher rents compared to off-street shopping centers.”
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