“Tough decisions”: South Florida to feel sting as office debt matures
From late 2020 to early 2022, out-of-state companies moving to South Florida flocked to the canyon of skyscrapers in Brickell, the mural-adorned buildings in Wynwood and new projects in downtown West Palm Beach.
The party hasn’t spread to every corner of the region.
“I think where you will see more distress is Class C office buildings or not terribly attractive office buildings,” said Alex Horn, of Miami-based bridge lender BridgeInvest.
Such offices were once “a place to put a body” but are no longer necessary, he said, thanks to remote work. That is evident in South Florida’s suburbs.
This year, tech firm Ultimate Kronos Group left its longtime home at the Weston Corporate Campus, consolidating its offices. Cable & Wireless Communications withdrew from its 25,000-square-foot headquarters at the Landing at MIA campus, west of the airport, with five years left on its lease. This summer, it offered half of the space for sublease.
Where tenants are hesitant about suburban offices, lenders are steering clear.
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