While Orlando’s office market continues to face headwinds, developers in South Florida have found the secret sauce to attract tenants and investment in new office towers.
The hottest new amenity in the trophy tower isn’t the fitness center, public art or even F&B — though all of those are important. It’s the merger of health services with offices. Jordan Rathlev, executive VP at Related Ross, told journalists at the National Association of Real Estate Editors Annual Conference this week that incorporating concierge medical services into its newest office towers has made West Palm Beach one of the nation’s most desirable office markets.
“I think in the past, combining traditional office space and medical uses in the building has probably not been top of mind,” Rathlev said. “Obviously, there’s the connotation of having a doctor’s office and a traditional office co-mingled.”
Case in point: the company is currently building 10 and 15 CityPlace, side-by-side towers that are fully pre-leased with a combined 950,000 square feet of Class-A office and retail, including a 120,000-square-foot outpatient facility.
“It has its own lobby, its own valet. So, you have the access and the ability to get health care in your building, so you don’t have to leave and go to the doctor’s office during your workday,” he said. “That’s an elevator right away, but you also don’t feel like you’re part of the medical complex. They are completely bifurcated experiences and designed that way, but still have the accessibility to have it within the building and the ability to go there during the day and not lose a lot of productivity.”
Rathlev said capital markets are pouring money into West Palm because of the quality of the new product and the strength in pre-leasing. Related Ross, which has a 3 million-square-foot development pipeline, doesn’t build anything on spec. “If you’re 50-60% pre-leased before you even take a dollar under a loan, those deals make a lot of sense.”
Robert Clemens, who leads the New York and Philadelphia office of Perkins & Will, has found that medical and research users can revive a sector of the office market many landlords thought was a lost cause: the suburban office park. Clemens specializes in adaptive reuse and helped convert a historic auto repair facility in New York into West End Labs, a multi-tenant Life Science center with shared conferencing and amenities.
So what else makes a great workplace? CBRE’s Emily Bottello says it’s creating spaces that encourage employees to collaborate without feeling crowded. “People are what draws other people together,” she said. “It’s not the best coffee machine, it’s not the coolest desk. It’s not like the best artwork. Whatever it might be, it’s other people.”
Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261. Follow GrowthSpotter on Facebook and LinkedIn.
