Three South Florida municipalities were among 30 U.S. cities listed in a recent report as potential corporate C-suite relocation sites.
The 20-page report, prepared by corporate site relocation firm The Boyd Company, listed suburban “submarket” cities with low overhead costs and close proximity to where support staff actually live. Because corporate relocations are 18 months out, the report factors in future Class A office projects that will likely be built in that timeframe, said The Boyd Co. principal John Boyd, Jr.
The report also purposely avoided large cities altogether, particularly downtown central business districts where office rents are expensive. The suburban cities listed in The Boyd Co. Report – all in states with low-to-nonexistent state personal income taxes and corporate income taxes – have annual operating costs between $17.79 million and $21.13 million.
“Companies are increasingly looking to identify submarket cities,” said Boyd, whose firm has offices in Boca Raton and Princeton, New Jersey.
That’s because, according to the report, suburban offices are more preferable to downtown areas in the post-pandemic era.
“The suburban office market continues to be very much alive and well throughout most of the country,” The Boyd Co. report stated. “…The popular notion that most young professionals want to live in downtown is much more perception than reality. This has been the case for some time, only to be heightened by the pandemic, remote working, soaring big city housing and rent costs, and growing concerns about crime and safety in many urban centers.”
Boyd said all those rules don’t necessarily apply to South Florida, where return-to-office trends have been stronger. Nevertheless, high office rents and long commute times for workers living in the suburbs are also factored in by companies considering a relocation move to South Florida.
“They want the benefits of being in the Miami metro area with respect to proximity to the airport, the migration of talent, and the location branding Miami brings to the table… but in the most cost effective way possible,” Boyd told the Business Journal.
Within South Florida, the cities of Aventura, Sunrise, and Boca Raton are the most ideal corporate relocation sites within their respective counties of Miami-Dade, Broward, and Palm Beach, Boyd said.
Aventura and its surrounding area in northeast Miami-Dade and southeast Broward is particularly attractive, Boyd said, due to the recently opened Brightline train station and abundant amount of restaurants and retail, particularly within Aventura Mall, one of the largest shopping centers in the U.S. Aventura’s annual operating costs of $19.73 million also make it a competitive location in regards to affordability, he added.
According to a recent market report from Colliers, Aventura and neighboring Sunny Isles Beach has 2.54 million square feet of office. As of the fourth quarter of 2022, asking rents in that area were $52.25 per square foot. In comparison, rent in Miami’s Brickell Financial District, a popular office destination for new-to-market companies, was $85.36 per square foot.
Additional office space will be coming soon to Aventura, Boyd added, including Two Turmberry, a 14-story office building that’s proposed to be built by Aventura Mall near a future pedestrian bridge toward the Brightline train station.
Sunrise’s location to I-95 and its low annual cost of $19.66 million also make it an ideal place to open a corporate HQ, Boyd said. Metropica, a four million-square-foot mixed-use project that’s being built in phases within Sunrise’s Sawgrass Park area, will bring more than 650,000 square feet of new Class A office, he added. As of the fourth quarter, Sawgrass Park has 4.54 million square feet of office where the average asking rent is $39.98 per square foot, according to Colliers. In contrast, office rents average $50.24 per square foot in downtown Fort Lauderdale.
Within Palm Beach County, Boyd said that Boca Raton is the best affordable alternative to downtown West Palm Beach. Its annual costs are $19.6 million a year, the report stated. Additilnally, Boca Raton’s mayor Scott Singer is very pro-business, a Brightline train station just opened, and its 5.3 million square feet of office is in close proximity to retail and restaurants, including Mizner Park shopping mall, Boyd said.
Asking rents for offices in Boca Raton averaged between $37.51 and $50.26 per square foot, depending on the area, according to Colliers. In Downtown West Palm Beach rents average $79.13 per square foot.
Of the 30 cities listed in the report, eight are located in Florida. The municipalities outside of southeast Florida that made the list include Naples, Palm Bay, Lake Mary, Sarasota, and Ponte Vedra, and their annual operating costs range from $18.45 million to $19.23 million, according to the report.
Boyd said Florida is still one of the most cost-effective places to have a corporate office. However, many companies are wary of Florida’s rising housing and insurance costs, he added.