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LTC 165-2021 CLASS A OFFICE SPACE MARKET CONDITIONS
DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 MlANIBEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov OFFICE OF THE CITY MANAGER 16 5 -2 0 21 LETTER TO COMMISSION TO : FROM: DATE: SUBJECT: Mayor Dan Gelber and Members of the City Commission Raul Aguila, Interim City Manager ( "on e ["tr= April 19, 2021 ·esAcoser2A+A CLASS A OFFICE SPACE MARKET CONDITIONS The L TC is prepared in response to a motion passed at the March 24, 2021 meeting of the Land Use and Sustainability Committee (LUSC) concerning a proposed ordinance for 'Commercial Height Limits for Office Uses -Alton Road.' The motion included, in part, direction to prepare fact-based data analysis concerning Class A office space demand in the city. Background On December 11, 2019, at the request of Commissioner Ricky Arriola, the City Commission discussed the promotion of Class A office space north of Lincoln Road and directed the Administration to prepare an RFLI for review by the City Commission. While a subjective classification that is more accurately identified by the top 25% of the market's asking rental rates, the City's real estate consultant shared that the term "Class A" refers to: In general, a Class A building is an extremely desirable investment-grade property with the highest quality construction and workmanship, materials, and systems, significant architectural features, the highest quality/expensive finish and trim, abundant amenities, first-rate maintenance and management; usually occupied by prestigious tenants with above-average rental rates and in an excellent location with exceptional accessibility. These properties are most eagerly sought by international and national investors willing to pay a premium for quality and are often designed by architects whose names are immediately recognizable. A Class A building is often considered to be a landmark, either historical, architectural, or both. It may have been built within the last 5-10 years, but if it is older, it has been renovated to maintain its status and provide it many amenities. Buildings of this stature can be one-of-a-kind with unique shape and spacious floor plans, notable architectural design, such as floor-to-ceiling windows and high-end finishes, an excellent location with water views and a definite market presence. On June 24, 2020, at the request of Mayor Dan Gelber and co-sponsor David Richardson, the City Commission referred to the LUSC a discussion regarding potential amendments to the Land Development Regulations, pertaining to building height increases for strategic commercial areas in order to incentivize office uses. In support of the measure, the September 22, 2020 LUSC Committee Memorandum included empirical data about the current Class A and B office space capacity and vacancy in the City, Lincoln Road, and South of Fifth. Specifically, attached to the Memorandum as exhibits were: (1) a summary of Class A properties in South Beach and (2) CBRE, lnc.'s Q2 2020 Miami Office Statistics report, which indicated that Miami Beach was experiencing lower vacancies levels and higher lease rates than all of Greater Miami on average. DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 L TC - Class A Office Space Market Conditions April 19, 2021 Page 2 of5 On October 13, 2020, L TC 359-2020 informed the City Commission of the issuance of RFLI 2021-029-KB for Class A Office Development near Lincoln Lane North (the "RFLI"). Attached as an exhibit to the RFLI was CBRE's October 2020 Office Market Overview, which contained detailed Q3 2020 statistical data concerning office market inventory, vacancy, demand, and trends for the Greater Miami region and the Miami Beach submarket. In support of the City's initiative, the report listed seven (7) significant new-to-market tenants to Miami Beach, accounting for 211,336 sa. ft. of office space leased by firms that were not previously operating offices in Miami Beach. CBRE also noted that, "As we continue to benefit from high wage talent relocating to South Florida and Miami Beach, there is a shared belief and vision that decision makers in the alternative investments industry, financial services and other sectors will strongly consider opening satellite offices or relocate certain business operations to Miami Beach." On February 12, 2021, LTC 063-2021 updated the City Commission on the results of the RFLI, which yielded letters of interest from eighteen (18) respondents. Four (4) of these respondents were companies based outside of Florida, which further substantiates non-local interest in office space development in Miami Beach. Class A Office Development Public Meeting Pease ¡cin the City of Mos Beoh ardi Co'es for a pub ¢ reetrgnanupcrg HP hoe Class Ohe De ekop ert neat trol kosad D eiope s ond rMeesed po tes wili hgve le 01pcrtiy to stare nsigh wt Cy al ad rhea preerot es oror to "he release oé th Qi her m's tar«lrrot we Thursday , April 8, 2021 at 6 PM join the rtoi pub ic meeting https://roo m.us/1/98918713854 Vo phone: 301.715.8592 r 833 548 0282 (Toll tree) Wero» 1. 989 1871 3854 for mcre in'rmatic, piece cantot cur iconsri Development Team a MB3'z@Moniechfl g: On March 17, 2021, the City Commission adopted Resolution No. 2021-31617, which authorized preparation of an office space RFP for Lincoln Lane North as part of a formulated policy aimed at attracting out-of-state tenants in targeted industries. On April 8, 2021, the City conducted an industry webinar to promote the RFP and solicit questions and input from interested parties, which was attended by over eighty-five (85) non-City staff/consultant participants. Current Miami Beach Office Market The market data accompanying the foregoing agenda items demonstrated that the office sector has been particularly resilient throughout the pandemic. Today, existing conditions continue to suggest a favorable outlook for the Miami office market and support the City's efforts to incentivize Class A office development. According to Cushman & Wakefield's Miami-Dade Marketbeat Office Q4 2020 (Exhibit A), Miami Beach's overall vacancy rate is 8.4% among its 1,842,523 sq. ft. of total office inventory, compared with the Greater Miami market's 16.2% overall vacancy rate among its 45,592,830 sq. ft. cumulative office inventory. According to JLL's Office Insight Q4 2020 (Exhibit B), Miami Beach's average asking rental rate among its 663,696 sq. ft. of Class A office space is $56.76 per sq. ft., DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDDA4ADD3 L TC - Class A Office Space Market Conditions April 19, 2021 Page 3 of 5 compared with Greater Miami's average asking rent of $49.66 per sq. ft. among its 22,551,875 sq. ft. of Class A office space. Both Q4 2020 reports by JLL and Cushman & Wakefield suggest that no new office space has commenced construction in Miami Beach during the reporting period. In February, the Related Group received Design Review Board (ORB) approval for One Island Park, a project made possible by a strategic height increase ordinance for office uses. The five-story Terminal Island project located at 120 MacArthur Causeway proposes 122,000 sq. ft. of Class A office space with 14-foot floor-to-floor open plan floor plates that capitalize on Miami Beach's unique oceanfront views. It is conceivable that the developer could spend another year to develop construction drawings, then 6-12 months to obtain a building permit, and another 12-18 months to complete construction before the project comes on line. The ORB application letter of intent noted that: The Property is ripe for development, and, in fact, the Applicant is currently in negotiations with a user that is exactly the type of tenant that the Height Ordinance is intended to attract. It has never been more relevant or important to incentivize the type of development that will fortify the City's economic future. The strategic development of modern, amenitized Class-A office space on the Property will establish an office environment that is competitive with other office products offered throughout the County and will create a significant economic benefit to the City. The Great Migration to Miami JLL's report notes that a rapid resurgence in demand is adding to growth in asking rates, a growth that slowed but endured despite the uncertainty of 2020. The report notes how Q4 2020 in Miami was punctuated by prominent financial firms announcing their intentions to enter the market or expand existing operations, with JLL citing more than a dozen new firms, including Citadel, Goldman Sachs, Colony Capital, and Blackstone, setting to lead a new wave of growth in the financial sector across South Florida. According to the March 2021 CBRE report Capital, Companies, and People: A Look at the Drivers behind the Great Migration into South Florida (Exhibit C), unprecedented investment interest has permeated South Florida throughout 2020 and in the early days of 2021. While new-to-market office tenants leased 550,000 sq. ft. of new space in South Florida in 2020 and 2021 combined, new-to-market tenants are anticipated to enter the market and lease nearly 600,000 sq. ft. during the year 2022 alone. Companies view South Florida as a connected global metropolis that offers lower taxes and is more business-friendly than primary coastal markets with restrictive regulations. The lack of a state income tax is enticing people into the region, including remote workers who are seeking a higher quality of life. According to CBRE, a recent report ranked Florida fourth (4) overall on business tax friendliness, and this ranking increases to first (1) when considering states with a workforce over two million. What is emerging as the potential game changer has been the relocation of several tech venture capitalists who are establishing new investment entities that are domiciled in South Florida. Not only has this phenomenon attracted a vibrant media buzz, but employment data reports that the financial activities sector has risen 1% year-over-year, a significant gain considering that the industry makes up almost 8% of total employment in South Florida. Some high-profile developments in targeted industry recently coming to Miami include: DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 L TC- lass A Office Space Market Conditions April 19, 2021 Page 4 of 5 August 2020: • Billionaire investor Carl Icahn relocates Icahn Enterprises from New York to Sunny Isles Beach, leasing 24,000 sq. ft. at Milton Tower and purchasing a home on Indian Creek island. October 2020: • The Beacon Council reports that FY 2019-2020 witnessed the second-highest level of capital investment in the organization's 35-year history-more than $772 million, with 2,904 new direct jobs and commitments from 34 companies looking to relocate or expand in Miami-Dade County. December 2020: • Starwood Capital Group tops off its new 144,000 sq. ft. Class A office building at 2340 Collins Avenue, reflecting a relocation and expansion within Miami Beach, with 45% of the building already leased to third-party tenants. • Goldman Sachs announces plans to relocate its asset management division, which generates $8 billion in annual revenue for the firm, to the Miami area. • Billionaire investor and Shutterstock CEO Jon Oringer purchases a $42 million mansion on Miami Beach's North Bay Road and Founders Fund general partner Keith Rabais purchases a $29 million property on the Venetian Islands. High-profile investor and founder of Blumberg Capital David Blumberg purchases in Miami, telling finLedgerthat "My prediction's that the Miami area is not going to be only a center for investors, but that technology firms will start to follow here. I think the investors are leading the way here. But talent and energy will soon follow. There's a whole crowd of us now." January 2021: • Private equity giant Blackstone Group signs 41,000 sq. ft. long-term lease at 2MiamiCentral to house its 215-employee tech division, as part of the Beacon Council's Confidential Project Sunshine (for which Miami-Dade County approved incentives up to $650,000 over 10 years last October, citing an annual average wage of $200,000 for the 215 employees). In March, Blackstone then purchases the 2MiamiCentral and adjacent 3MiamiCentral (together, some 330,000 sq. ft. that is 98% tenant occupied) for $230 million. • The Real Deal reports that Microsoft is seeking to lease 30,000 sq. ft. in Brickell, perhaps at the same property for which Chicago-based hedge fund Citadel is seeking an 80,000 sq. ft. expansion into Miami, while billionaire Citadel founder Ken Griffin acquires residential property on Star Island. • Japanese multinational conglomerate Softbank announces a $100 million commitment to support venture-backed startups in the Miami region or those who plan to move here. The website for the Miami Initiative (www.softbank.com) prominently features Ocean Drive. SoftBank's $5 billion Latin America fund is headquartered in Miami, as well. • Billionaire entrepreneur Peter Thiel, co-founder of PayPal and San Francisco-based venture capital firm Founders Fund, purchases two adjacent Venetian Island mansions for $18 million. February 2021: • Small-ship specialist Windstar Cruises announces office relocation from Seattle to Miami by June 2022. Windstar President Christopher Prelog tells Travel Pulse that, "as the center of the cruise industry in the U.S., a Miami office will help build industry relationships and attract new talent." • With its website (www.Pareto20.com) featuring a video of Ocean Drive and a tagline of "Building world-changing companies in the Miami sunshine", Jon Oringer's Miami tech funding incubator venture Pareto Holdings seeds its first company in Miami. • Florida Funders, a Tampa-based venture capital firm and angel investor network, announces that it is seeking locations to open a Miami office. March 2021: • Subway announces the move of several business units and part of its corporate headquarters, representing 10% of its workforce, from Connecticut to Doral by 2022. "With its dynamic business climate, diverse population and multicultural influences, [Miami] was the ideal place to transition DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 L TC- Class A Office Space Market Conditions April 19, 2021 Page 5 of5 some of our consumer-facing roles," a memo to employees stated. Subway CEO John Chidsey owns a home in Coral Gables where he spends most of his time. • Bitcoin 2021, the world's largest cryptocurrency conference, announces venue relocation from Los Angeles to Wynwood for the June 2021 in-person event. Keynote speakers include Twitter CEO Jack Dorsey, with more than 100 exhibitors at the hybrid conference and festival. Conclusion An increasing velocity of activity towards Miami is evidenced by the attached reports from trusted real estate analyst firms. New-to-market tech companies are relocating and being funded in Miami, with their billionaire owners and investors purchasing residences amid a lessening supply of single-family homes. An economic recovery is underway nationwide, and this recovery appears elevated in South Florida due to the increased interest in the region. Real estate analysts project Miami's office market to outperform the national average and Miami is the only market forecasted for rent growth over the next two years. As vaccines become widespread and international travel and investment resume, optimism remains high for Miami's economic growth The analytical data underscore the opportunity to leverage Miami Beach culture, the City's enhanced business climate, and underutilized real estate assets, in order to capitalize on the migration of investment funds, financial services firms and technology companies from high-tax environments. If you have any questions or need clarification, please contact Rickelle Williams, Economic Development Director, at rickellewilliams@miamibeachfl.gov. DocuSian Envelop MARKE TBEA M IAM I-DAD E or os »#td i =«. „J# EXHIBIT A/ # #. j,¿~lß~ t%, J# 482 ECONOMY Miami-Dade, part of the South Florida region, had an unemployment rate of 7.4% in November 2020, down 130 basis points (bps) from the previous month but 570 bps higher than one year ago. Nonagricultural employment was down 68,000 jobs, or 5.5%, over the year to 1.16 million. The major employment sectors to gain jobs year-over-year (YOY) were in manufacturing, adding 2,600 new positions and in Construction and Financial Activities with 1,300 and 200 new jobs respectively. The Leisure & Hospitality sector accounted for over 113rd of all job losses, with 24,600 gone, followed by Trade, Transportation & Utilities with 13,100 positions cut and Education and Health services with 10,900 jobs lost YoY 12-Mo. Chg Forecast 16.2% A ..... Vacancy Rate - -851K y A. YTD Net Absorption, SF r $41.48 A y Asking Rent, PSF r""'· "' Pro,e" C,a;,e,¡ ECONOMIC INDICATORS Q4 2020 YoY 12-Mo. Chg Forecast 1.1M Mi a m y A Employment 7.4% Miami A y Unemployment Rate 6.7% us A y Unemployment Rate Numb ers above are monthly figures. FL Dept Economic OPP SUPPLY Overall vacancy ended the year at 16.2%, an increase of 380 bps when compared to the end of 2019. Class A vacancy rose by 550 bps YOY to 19.4% with available space in Class B climbing by 390 bps to 15.7%. Negative absorption and new construction deliveries were the main factors for the upturn in vacancy. There was over -850,000 square feet (sf) of overall absorption in 2020, the lowest since 2009. Five projects delivered in 2020 that brought over 750,000 sf of vacant space combined to the market. The most notable projects included The Plaza Coral Gables-North Tower and 545 Wyn at 291,000 and 283,000 sf respectively. An expansion in vacant sublease space also caused vacancy to increase as it rose by 31.8% over the year. DEMAND New lease deals totaled approximately 1.4 million square feet (msf) in 2020, a 47.3% decline from year prior and the lowest amount since 2003. Approximately 34% of the total leasing volume occurred in the first quarter of 2020 before the COVID-19 pandemic shocked the economy. The second and fourth quarter of 2020 experienced the lowest amount of new leasing activity for any two quarters since 2003 with 255,000 and 265,000 sf signed respectively. The largest lease signed in the year was a 111,000-sf renewal/expansion signed by Morgan Stanley at the Southeast Financial Center. Leasing activity in Class A assets accounted for nearly 645,000 sf or nearly 47% of the volume in 2020 MARKET PRICING Overall asking rents rose 2.6% YOY to $41.48 per square foot (psf) full service, a cycle high. The main factor in increased rents was 912,000 sf of new Class A product that delivered with higher than average rents in major suburban submarkets. Most landlords held rents steady throughout 2020 and enhanced incentives such as tenant improvement allowance and free rent due to the lack of demand. For Class A assets, rental rates climbed to $47.16 psf YOY or a 1.5% boost Rates in the CBD experienced a drop of 2.7% to $44.45 psf while rates increased in the suburban submarkets by 8.5% to $39.92 psf. The Biscayne submarket experienced the largest YOY gain, up 16.0% to $48.09 psf due to the delivery of two new class A projects in the third quarter. SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT 950 700 450 200 -50 -300 -550 -800 $45 4 JI!lllll!! $15 20% 15% 10% 2016 2017 2018 2019 2020 $0 L,,,,A,,,,,,,,A,, ,,, ,a,,5% 2016 2017 2018 2019 2020 e - 4 #% 4 ~ i~ %4, d 9 tea MARKET STATISTICS SUBMARKET INVENTORY SUBLET VACANT DIRECT VACANT OVERA LL CURRENT QTR YTD OVERALL YTD LEASING UNDER CNSTR OVERALL AVG OVERALL AVG (S F) (S F) (SF) VACANCY RATE OVERALL NET ABSORPTION (SF) ACTIVITY (SF) (SF) ASKING RENT ASKING RENT ABSORPTION (ALL CLASSES) (CLASS A) Brickell 4ven ue 6.533.712 30.707 833.734 132% -33,023 -98.911 223,104 650,000 $49.14 $56.39 Downtown 7,277 ,445 50,978 1.,578,185 22.4% -43.899 -55.172 198,097 o $41.99 $49.90 C B D 13,8 11,157 81,685 2,4 11,919 18.1% -76,922 -154,0 83 421,201 650,000 $44.45 $52.25 S uburban 31,781,673 277 ,989 4,617,9 14 15.4 % -148,218 -697,038 966,449 742,3 91 $39.9 2 $44.70 Coral Gables 6,284,671 42,277 945,494 15.7% -54,822 -248.959 141,267 163,741 $45.48 $49.86 Airport \ Vest 11,058.744 163,983 1.,621,294 16.1% -50,344 -406.074 273,134 167.,182 $34.47 $36.62 Coral Wa y 626.935 o 28,906 4.6% 4,093 893 35,104 o $29.82 NIA South Da de 3,086.774 1.865 286,284 93% 16,478 -4,715 82.247 o $33.70 $44.17 Northeast Dade 2,522,968 19,015 286.421 121% -12,553 -42.015 105,726 o $45.54 $51.73 Biscayne 2.420.356 6.919 720,154 30.0% -21,575 74,958 87.226 300,468 $48.09 $50.53 Miami Lakes 1,697,830 33,181 340,836 22.0% -19 546 -52,713 121,208 o $28.94 $30.79 Coconul Grove 1,103,163 8,733 166.417 15 9% -6,609 58,796 60.817 111,000 $44.10 $49.35 S Gables/ S Miami 562,504 o 27.675 4 9% -12,349 -15,292 10.234 o $3723 $44.00 East Air or/Central Dade 575,205 o 41,167 7.2% o -5,572 3,306 o $29.04 N/A Miami Beach 1,842.523 2.016 153,266 8.4% 9,009 -56,345 46,180 o $47.99 $53.32 MIAMI TOTALS 45,592,830 359,674 7,029,833 16.2% -225,140 -851,121 1,387,650 1,392,391 $41.48 $47.16 KEY LEASE TRANSACTIONS 2020 Rental rates reflect full service asking PROPERTY SUBMARKET TENANT RSF TYPE 200 S Biscayn e Blvd 8400 NW 36 St 9250 NW 36 St Downtown Airport West Airport West Morgan Stanley Starboard Cruise Services, Inc West Coast University Inc. 111.000 60.504 47,378 Renewal/Expansion' Renewal" Renewal' Renewal not included in leasing statistics KEY SALES TRANSACTIONS 2020 PROPERTY SUBMARKET SELLER/ BUYER SF PRICEIS PSF Centrum Doral- One and Two Brickell City Centre- Two and Three Airport West Brickell Avenue Rialto Holdings/Banyan Street Capital Swire Properties/Northwood Investors 279,151 266,832 Portfolio Sale Portfolio Sale DocuSian Envelope ID LL3<a Silis&ks iSllsk JEHAN:MA I: # I, 2 % % %o #té #. OFFICE SUBMARKETS B Iii (A D~I -G=c-7 / lii [M „g i ,e.h 0 o e E.5.Ce] lEi@E@i±Li4 , - free.Ce@E@j, o [] - ---- a •lg •¡ lntema~ional - \) -- . ~ s 2 oh, ?" dllil o , „J 2s l} piri rv:- I -~ -~-" » I .== lk3.fii&$ ~ \ East Coast Buffer Water reserve Area [@CZ:Ee#fft7 Biscayne Bay é i t49 %° Trey Davis Associate Director Tel: +1 305 533 2846 trey_davis@cushwake_com A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. @2021 Cushman & Wakefield. AII rights reserved The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. cushmanwakefield.com DocuSign Envelope ID: 8BEA 14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 EXHIBIT B 0o)\I L Office Insight I Q4 2020 M iami New-to-market tenant announcements spur renewed confidence and rent growth • Several prominent firms including Elliot Management, Citadel, Goldman Sachs and Blackstone announced intentions to expand or establish operations in South Florida. • Miami's sublease availability remains among the lowest in the nation at just 2.2%. • Asking rates continued to ratchet upwards as demand resurged in the second half of the year, boosted by new-to-market tenants. Q4 2020 in Miami was punctuated by prominent financial firms announcing their intentions to enter the market or expand existing operations. More than a dozen new firms including Citadel, Goldman Sachs, Colony Capital and Blackstone are set to lead a new wave of growth in the financial sector across South Florida. This rapid resurgence in demand adds to the growth of asking rates that slowed but endured despite the uncertainty of 2020. Unlike many gateway markets that are experiencing a glut of sublease space, Miami's growing inventory is driven largely by new co nstruction. At just 2.2% of inventory, sublease availability in Miami is among the lowest in the nation. Leasing activity in Q4 picked up dramatically. Blackstone subleased 41,000 s.f. in Two MiamiCentral. HIG Capital renewed in place at 1450 Brickell and expanded into an additional 22,000 s.f. at The Plaza Coral Gables. Molina Healthcare also renewed but downsized by roughly 75% to 27,000 s.f. in Doral. Absorption at the end of Q4 was-176,000 s.f., mostly attributed to tenants renewing and co ntracting and others just giving space back to the market . WeWork gave back the 18 floor at Southeast Financial Cen ter, HSBC downsized at the Four Seasons and the entire 6floor became vacant at 801 Brickell after Charles Shwab elected to close its office temporarily. Outlook Miami is well-positioned to benefit from the distribution of office work and co ntinues to attract new residents and businesses from around the country. While available space and vacancy co ntinue to tick up, we anticipate that new-to-market demand will eventually result in occupancy gains for Miami. Subsequently, rent growth is likely to accelerate during the year in the most desirable assets while economic headwinds and a flight to quality place pressure on rents in lower quality buildings. Fundamentals YTD net absorption Under construction Total vacancy Sublease vacancy Direct asking rent Sublease asking rent Concessions Forecast -511,569s.f. A 1,472,418s.f. A 18.1% ► 317,660 s.f. A $44.18 p.s.f. $38.06 p.s.f. V Increasing A Supply and demand (s.f.) Net absorption Deliveries 1,0 00,000 o -• -- ' .. ' -1,000,0 00 2016 2017 2018 2019 2020 Total vacancy (%) 30% 20% 10 % 0% 2006 2008 2010 2012 2014 2016 2018 2020 Average asking rent ($ p.s.f.) S5() D irect S ublease $40 $30 $20 $10 2006 2008 2010 2012 2014 2016 2018 2020 For more information, contact: Benjamin Landes/ bcnjamin.landcs@am.jll.com Do cu Sign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 Miami 94 2020 JLL Research Report Office Statistics Inventor Total net YTD total net YTD total ne rect vacan Total vacant Average Yr Under Class ,, absorption absorption absorption % ," ""' direct asking Completions Development s.1.1 (s.f.) (s.f) of stock) (%) (9) „nt($s.f.) (s.f.) y Brickell Totals Downtown Miami Totals CBD Totals Aventura Totals Coconut Grove Totals Coral Gables Totals Kendall Totals Miami Airport Totals Miami Beach Totals Miami Lakes Totals Suburbs Totals 6,725,125 -55,452 1,691 7,108,494 -40,445 42,352 13,833,619 -95,897 44,043 1,254,640 -13,036 9,383 1,137,379 41,463 94,182 6,277,416 -22,723 -172,984 2,747,640 -5,880 -63,764 10,196,482 -90,290 -324,197 1,833,370 10,612 -83,640 1,376,739 -435 -14,592 Miami Totals 38,657,285 -176,186 -511,569 -1.3% 17.3% 18.1% $44.18 592,397 1,472,418 24,823,666 -80,289 -555,612 0.0% 12.6% 13.3% $58.40 0.6% 25.0% 25.5% $41.73 0.3% 18.9% 19.6% $49.55 0.7% 18.6% 19.9% $52.81 8.3% 14.4% 15.2% $53.47 -2.8% 16.0% 16.5% $45.75 -2.3% 11.4% 12.3% $35.70 -3.2% 17.4% 18.7% $34.02 -4.6% 13.9% 14.3% $52.96 -1.1% 22.3% 22.5% $25.95 -2.2% 16.3% 17.3% $40.46 o 664,300 o 48,000 o 712,300 102,287 285,377 85,762 211,000 291,267 163,741 o o 113,081 100,000 o o o o 592,397 760,118 Brickell A Downtown Miam i A CBD A Aventura A Coconut Grove A Coral Gables A Kendall A Miami Airport A Miami Beach A Miami Lakes A Suburbs A 4,971,840 4,213,269 9,185,109 930,545 591,917 4,333,813 1,046,724 5,388,453 663,696 411,618 13,366,766 -53,125 -42,692 -95,817 -10,356 49,501 -16,130 -4,276 -59,202 145 -1,931 -42,249 12,626 47,378 60,004 11,040 130,925 -126,453 -17,875 -215,836 -50,259 -4,940 -273,398 0.3% 10.3% 11.1% $63.92 o 664,300 1.1% 23.3% 24.0% $48.87 48,000 0.7% 16.3% 17.0% $57.16 o 712,300 1.2% 19.6% 20.8% $54.33 102,287 285,377 22.1% 11.3% 12.3% $66.06 85,762 180,000 -2.9% 17.6% 18.0% $47.74 291,267 163,741 -1.7% 13.5% 13.5% $41.21 o o -4.0% 21.0% 23.1% $36.04 113,081 100,000 -7.6% 15.2% 15.8% $56.76 o o -1.2% 20.4% 21.1% $29.36 o o -2.0% 18.5% 19.6% $44.42 592,397 729,118 Miami A 22,551,875 -138,066 -213,394 -0.9% 17.6% 18.6% $49.66 592,397 1,441,418 Brickell B 1,753,285 -2,327 -10,935 -0.6% 19.0% 19.6% $38.15 o Downtown Miami B 2,895,225 2,247 -5,026 -0.2% 27.4% 27.7% $32.39 o CBD B 4,648,510 -80 -15,961 -0.3% 24.2% 24.6% $34.15 o o Aventura B 324,095 -2,680 -1,657 -0.5% 15.9% 17.5% $40.71 o o Coconut Grove B 545,462 -8,038 -36,743 -6.7% 17.7% 18.3% $41.67 o 31,000 Coral Gables B 1,943,603 -6,593 -46,531 -2.4% 12.7% 13.3% $38.02 o o Kendall B 1,700,916 -1,604 -45,889 -2.7% 10.0% 11.5% $31.62 o o Miami Airport B 4,808,029 -31,088 -108,361 -2.3% 13.3% 13.9% $30.87 o o Miami Beach B 1,169,674 10,467 -33,381 -2.9% 13.1% 13.4% $39.87 o o Miami Lakes B 965,121 1,496 -9,652 -1.0% 23.1% 23.1% $24.58 o o Suburbs B 11,456,900 -38,040 -282,214 -2.5% 13.8% 14.5% $32.65 o 31,000 Miami B 16,105,410 -38,120 -298,175 -1.9% 16.8% 17.4% $33.25 0 31,000 p02021 Jones long L0Solle IP, Inc ll nights reserved A! information contained herein is from sources deemed reliable; however, no representation or worronty is mode to the accuracy thereof DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 CBRE RESEARCH EXHIBIT C CAPITAL, COMPANIES, AND PEOPLE the at South Florida MARCH 2021 CBRE DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 r:BLE OF CONTENTS 03 Introduction 04 Capital APIIAL MARKETS, B8USINESS CAPITAL, INFRASTRUCTURE 06 Companies TECH, FUTURE WORK, AGILE WORKSPACE 08 People STAS, LA8OR FORCE, FOUNDERS/FUNDERS 1 O Conclusions CBRE Research © 2021 CBRE, Inc The drivers behind the great migration into South Florida 1 2 DocuSign Envelope ID: 8BEA14DA-C26F -43EA-BFAE-CD7CCDD4ADD3 An unprecedented amount of investment interest has made its way into South Florida throughout 2020 and in the early days of 2021. We have broken this trend down into three separate buckets of analysis, taking note of the most impactful drivers of South Florida economic success in 2020 and beyond. C A PITA L C O M PA N IES PEO P LE Transaction Activity 2.6 Billion in December 2020 Real Capitol Analytics O Venture Capital +33% Y-0-Y Crunch base O Cross Bo rder Investm ent -380 BPS Share Real Capitol Analytics New To M arket Offi ce Tenants 1.1 Million SF in Market CBRE Research Offi ce Asking Rents 2-Year Increase Forecasted CBRE Research O Estimated An nual Tech Firm Savings " 35% Compared to Bay Area CBRE Research O Available Inventory - Single Family -7% Y.-0-Y MetroStudy O Multifamily Daily Vacancy Rate Stable in Ql 2021 CoStor Financial Activities Em ploym ent +1% Y-0-Y(De 2020) F0O KEY TAKEAWAYS o Capital has been finding its way into South Florida at a heightened rate. The region has experienced a wave of investment from investors seeking higher yield, but also new capital investment such as infrastructure upgrades and from venture capitalists. Raised business capital is at a decade-long high, with an elevated amount from venture capitalists. o Companies recognize South Florida as a connected global metro region, more business- friendly than primary coastal markets with restrictive regulation, and lower business taxes. In the past, moves to South Florida have been balanced against the availability of labor - but in today's remote world, that balance has been shifted. In the meantime, the talent pool in South Florida continues to grow, even during the pandemic. o People are also investing in South Florida. The lack of a state income tax is enticing people into the region, in the form of remote workers who are seeking a higher quality of life, and by high- wealth households who continue to relocate and expand in the area. What is emerging as the potential game-changer has been the relocation of several tech venture capitalists who are establishing new investment entities with South Florida addresses. This has attracted a vibrant media buzz from both traditional outlets and social media platforms. CBRE Research '2UZI BRE, Inc The drivers behind the great migration into South Florida } 3 DocuSign Envelope ID: 8BEA 14DA -C26F-4 3EA-BFAE-CD7 CCDD 4ADD3 ra.. #.# Capital Markets Investm ent sales of real estate, after a ten-m onth lull, return ed in significant fa shion in Decem ber 2020. A portion of this act ivity can be attributed to pent-up dem and, but ca pital is com ing from new-to-m arket investors taking advantage of local private capital holding out fo r disco unted price s. These new investors include life co mpanies, investors seeking 1031 Exchange progra m opportunities, and others. Although some distressed hotels and retail assets have sold at a discount, sellers of prime assets ar e holding firm on pricing, seeing no reason to discount given strong recovery m etrics. A rece nt big win fo r South Florida was Blackstone doubling-down on their relocation of their tech division to M iam i. Just weeks after that announcem ent, a Blackstone fund closed on 2 and 3 M iam iCentra l, where they recently loca ted their tech division. This $230 million tra nsact ion is their first significant office asset within South Florida. Business Capital Considering all funding ro unds, business capital has been flying into South Florida at a record ra te. W hether venture capital or post-I PO funding, local businesses are well capitalized. W hat's m ore, funders who have reloca ted to the region are also reloca ting or expanding their funding gro ups to the region. Both Par eto Holdings and Florida Funders, new to South Florida, are exam ples of this act ivity . Additionally, Softbank announced a $100 m illion co m m itm ent in South Florida, to support venture-backed startups and late-stage growt h com panies that ar e based in M iam i or relocate to the ar ea. South Florida is already the hom e to a SoftBank office that sources new investm ents fo r its $5 billion technology growt h fund that fo cuses exclusively on startups in Centra l and South Am erica. Latin A m erican growt h in tech industries, especially Fintech, will also benefit South Florida. Fintech pro vides altern atives to the financing options offered by tra ditional banks, m aking it easier and fa ster to access funds. According to Crunchbase, Latin American Fin T ech's received 31 % of the region's venture capital in 2019. As this continues to grow, so will the need fo r U.S.-based offices, specifica lly those in South Florida. Capital as Infrastructure As airlines around the U.S. are econom izing flights from less product ive cities, routes to Florida have been expanded, especially fo r South Florida airports. Am erica n Airlines, JetBlue, and Southwest ar e all adding flights from M iami, the fo rm er m aking the m ove to establish a direct flight from M iam i to Tel Aviv. Regarding JetBlue, the air carrier is unveiling their sought-after M int Business Class on flights to L.A. PortM iam i and Port Everglades upgra des have been instrum ental in encoura ging tra de growt h and growt h within the cruise industry , helping to co ntinue their reign as key econom ic drivers fo r the region. Regarding mass-tra nsit infr astruct ure, the Brightline, a regional high-speed rail system continues to add stops and is underw ay to complete a connect ion with O rlando in 2022; and with Ta m pa by 2025. CBRE Research 1 2021 CRE, Ic The drivers behind the great migration into South Florida 4 DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 ra... April 2019 September 2020 November 2020 December 2020 January 2021 January 2021 January 2021 February 2021 February 2021 February 2021 March 2021 Ma~h2021 i Brightline secures funding for Orlando extension, with a 2022 target for project completion Southwest expands South Florida presence into Miami with 12 daily flights SoftBank establishes $5 billion Latin A m erica investm ent fund JetBlue anno unce s M iami expansion incl uding M int Business Class to Los A ngeles Plug and Play tech incubator opening M iam i office SoftBank cre ates $100 m illion M iam i tech fund, aim ed at local start ups Elo n M usk's Boring Co. pro poses 3- m ile tunnel to ease dow ntow n Ft Lauderdale tra ff ic Data Center opera tor Cyx tera to m erge w ith Star boar d in $3.4 billio n deal Par eto Ho ldings, a new M iam i tech funding venture, seeds first com pany, a local gift-giving platform called G oody Founders Fund, w ith over $5 billion ra ised and 110 exits, opens M iam i office w ith local expansion plans Blackstone extends com m itm ent to M ia m i, buying both 2 and 3 M iam iC entra l in a $230 m illion deal Bitco in 202 1, the w orld's lar gest cry ptocurrency confe rence, announces venue m ove fr om Los A ngeles to M iam i CBRE kesearch Z U'2 I BRE, Inc. DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 ra... FIGURE E- MONTHLY CRE CAPITAL MARKETS VOLUME - SOUTH FLORIDA i , .ai ----- --- - ==. ------ - e e- ------- ------- ------ zp a - Billions $3.0 $25 $2.0 $1.5 $1.0 $0.5 $ DECEMBER - $2.68 O- O O O O- O > = = = > > ";' c CJ I 6 ~ ' ' ~ ' ' r> c- > > = = £ - > > . 0 ge o- ::, -2 a 1 r. = = -1 1 = = _r #5EA ." JDC.ma I I••:..:.-- __ - III#fie = ;;;/3i77 "·.' I/JI ·j I I,,~_-~ / I I IA II I 2plug II'/, . 111,11111\ liliMIII III ii iii ii ik -. - - ., - - < -~ --- a -----~- ----,- q ----- - e % r a a , y ª \ Source. Real (Capitol An al/i s, (RE Research, February 2021 FIGURE 2. TOTAL BUSINESS FUNDING ROUNDS- SOUTH FLORIDA Billions $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $ VENTURE CAPITAL ALL OTHER SOURCES 2017 2018 2019 2020 Source: Guchbase, (B8RÉ Reseorch, Marh 2021. FIGURE 3: TOTAL AIRLINE PASSENGERS BY MONTH Millions 25 2.0 1.5 1.0 0.5 MIA FTL PBI Source. (runhbose, (8RÉ Reseath, Marh 2021 The drivers behind the great migration into South Florida } 6 DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 rc;,MPANIES : A New Tech Hub? Although Miami overtaking Silicon Valley as the U.S. tech capital is unlikely, it could find a role as a tech "spoke" market, as Austin, Nashville, and Phoenix have become. These cities have established their own tech ecosystems that embrace collaboration with other markets. For example, Miami and New York already have long-standing connections established, which could grow into a relationship like the Bay Area and Los Angeles share, where investors will often invest in startups from the other city and vice-versa. South Florida also benefits from its position as a hub for Latin American/U.S. ventures, where it is looked upon as a unifying force for firms looking to put down roots in Central and South America. This connection benefits both the office market and the residential market. As reported in the 2020 Scoring Tech Talent report from CBRE, Latin America's growth in the tech sectors has been prodigious. From 2015 to 2019, Latin Am erica's top 1 O tech markets grew their talent at a 32% pace, compared to the U.S. average of 17% growth. Working in the Future The office-using labor force, having just spent the greater part of 2020 working from home, now have greater options on where they reside. If a significant percentage of the workforce moves to a more flexible office and home strategy, occupiers may have more flexibility on office location strategy. Although office usage will be impacted by this new reality, South Florida will be somewhat insulated by the effects. A recent study by CBRE shows that South Florida's workforce has less opportunity for remote work than in other markets. In addition, the average footprint for office occupiers is smaller than other primary coastal markets, such as New York City or San Francisco. The office presence in South Florida for companies will likely be looked upon as less of a liability. Some firms are even expanding their presence here, while downsizing elsewhere. Normalization of remote work is encouraging businesses to relocate out of higher-priced West and East Coast markets to the area. The idea of firms transferring business units and operations to the Southeast is not a new concept, as detailed in the recent CBRE report "Real Estate Strategy Reset - 8 Core Truths Guiding Future Work." To encourage relocation activity, Florida leadership has been able to remain competitive regarding business tax. A recent report ranked Florida 4th overall on business-tax friendliness, a ranking that increases to 1st when considering states with a workforce over two million. Flexible Office Reveals its Value The presence of agile workspace will benefit the South Florida office market. Moving into a new market with multiple options creates an ease of transition, which allows firms to focus on what is important, namely integrating their business into a new market. South Florida is one of the leading North American markets in the share of flexible workspace solutions, with a total footprint of over 2.6 million sq. ft. This has benefitted firms in the past, as several major corporations first tested the market in flexible space before committing to long-term space. The recent investment stake into flexible workspace operator Industrious by CBRE illustrates how the flexible office market is regarded as a critical segment of business development. With other commercial real estate advisors making similar moves, the use of flexible space within office occupier strategy will continue. South Florida will continue to be a destination for firms seeking new markets in which to diversify their footprint. BKE Keseorch I 2U'2I CBRE, Inc The drivers behind the great migration into South Florida 7 Do cu Sign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDDA4ADD3 ~MPANIES November 2018 Starwood Capital Group announce s move from Connecticut to Miami Beach, will develop new Class A office September 2019 Icahn Enterprises announces move from New York to Miami Beach, leases 24,000 SF at Milton To wer August2020 ShiftPixy moves HQ to Miami from % California, leases 13,000 SF at Courvoisier Centre I ,. November 2020 Elliot Management announce s plans to I move HQ from Midtown Manhattan to West Palm Beach December 2020 Goldman Sachs announces plans to move asset division to Miami Blackstone signs 41,000 SF lease at 2 January 2021 MiamiCentral to house their tech division The Real Deal reports major global January 2021 tech firm seeking 30,000 SF expansion into Miami The Real Deal reports hedge fund January 2021 Citadel seeking 80,000 SF expansion into Miami New Day USA, a Maryland-based January 2021 mortgage company, in lease negotiations in Palm Beach for 50,000 SF, Real Deal reports February 2021 Windstar Cruises moving HQ and 50 employees from Seattle to Miami by 2022 March 2021 Fintech firm Virtu Financial contracts in New York and expands into l 0,000 SF at DiVosta Towers in Palm Beach Subway announces the move of March 2021 several business units to office s in Miami by 2022 CBRE Research ' 2021 CBRE, Inc. DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 ~MPANIES FIGURE 4: CUMULATIVE EMPLOYMENT GAIN IN FINANCE, INSURANCE, PROFESSIONAL, SCIENTIFIC, AND TECHNICAL SERVICES - SOUTH FLORIDA Jolb»s (000') 25 20 15 10 5 o -5 -10 -15 f 7, 100 MORE BY Q4 2023 I .tlll 12,400 LOST IN 02 2020 RECOVERED BY Ql 2022 y o r y co r cy r y > dy I I I o O O o I cl I I I I I I I Cy y I I I > o o o o > > I I I I I I I I I I I I Cy I Source. Oáord Economics, 8RE Research, Marh 2021. FIGURE 5: NEW-TO-MARKET OFFICE OCCUPIERS - SOUTH FLORIDA SF (000'3) 700 600 500 400 300 200 100 o I LANDED IN-MARKET 2018 7019 2020 2021 2022+ Soure. (RE Research, Mord 2021. CBRE Research 1 2021 CRE, Inc. The drivers behind the great migration into South Florida ] 9 DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 r5.. Ir Moving Companies are the New Oracle The website MoveBuddha has been tracking domestic migration trends for years and has analyzed data on the buzz South Florida is receiving over Twitter and various search engines. Considering actual business, MoveBuddha analyzed 400,000 moves in 2020, finding that they assisted with 40% more moves into Miami than out of Miami, including a 16% gain in residents through relocation. Some pattern s were disco vered that tend to support the nar rative of residents leaving major co astal markets for the sun of South Florida. The top origin for moves to M iami was New York City, which accounted for almost 30% of the total moves. San Fra ncisco and Los Angeles were a distant seco nd and third, with 11 % and 10% of moves, respectively. Backing up these findings, a report by Linkedln called M igra tion's New Map listed the top 1 O metro areas in net gain of people, based on zip-co de changes of members. South Florida ranke d 9, with a 4.3% gain in net arrivals. The Labor Force Although the labor market has been critically affected by the pandem ic, signs are already emerging that the recovery is well underw ay. From February 2020 to April, South Florida lost almost 400,000 jobs, many of which were in the leisure and hospitality sector. In December of 2019, this sector made up over 12% of total em ploym ent in South Florida. As of Dece mber 2020, this share had fa llen to just over 10%, in an illustration of the impact the pandem ic has had on employment. Conversely, em ploym ent in the financial activities sector has risen 1 % year -over-year, a significant gain co nsidering that the industry makes up almost 8% of total em ploym ent in South Florida. In addition, the professional and business serv ices sector, although experiencing an overa ll job loss, has also gained in em ploym ent share during the year . Most of the losses in this sector have been in the administra tive and waste management industries. Jobs within professional, scientific, and technical, and in management of co m panies and enterprise, have declined by well under 2%. In addition, tech talent has been on the rise, with over 28% growth from 2015-2019, which is the sixth-highest growth rate in the U.S. South Florida's labor force is unique - about 49% of persons holding a bachelor's degree or higher are multilingual. This gives the area an advantage as technology enables firms to operate not just nationally, but globally. Founders and Funders - Welcome Home Restrictive business climates on the West Coast and in the Northeast have encouraged tech investors and entrepreneurs to seek out alternative places in which to invest in and to cultivate innovation. In 2020, the region of choice became South Florida. The tropical climate, a growing talent pool, world-class infrastructure, and perhaps most importantly the lack of a state income tax have all combined to turn on the lights and establish South Florida as the new frontier. High-profile investors including Founders Fund general partner Keith Rabois and Blumberg Capital founder David Blumberg moved to South Florida. These moves have set off a wave of interest from others in the field, prompting Twitter feeds of declarations of relocation to South Florida. In 2021, those announcements have continued, with sales of single-family waterfront homes soaring beyond the activity of previous years. C RE Reseorch ] 2021 CB RE , Ic. The drivers behind the great migration into South Florida I 1O DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 r5.. October 2018 January 2019 January 2020 January 2020 October 2020 November 2020 December 2020 December 2020 December 2020 December 2020 January 2021 February 2021 Softbank executive Marcelo Claure announces return to Miami Founder Lane Bess moves official residence to Miami Miami's School of Advanced Studies ranks 4"h in U.S. News & World Report Miami's Young Women's Prep Acad. ranks 21"in U.S. magnet schools Founder Jon Oringer purchases Miami Beach home Funder David Blumberg announces move to Miami "How can I help?" - Miami Mayor Francis X. Suarez Funder Keith Rabois purchases Miami Beach home Founder Alexander Lloyd on Twitter: "Moving to Miami to find the next unicorn." Census Data released: Florida 2° highest population growth; 20% of U.S. Total Funder Peter Thiel purchases Miami Beach mansion Palm Beach mansion sells for record $123 million; buyer reportedly Tiger Global executive Scott Shleifer CBRE Rese0rch ' 2021 CBRE, Inc DocuSign Envelope ID: 8BEA14DA-C26F-43EA-BFAE-CD7CCDD4ADD3 r... CBRE Research 2021 CRE, Inc. FIGURE 6: YEAR- OVER-YEAR TRANSACTION VOLUME - SOUTH FLORIDA Year-Over-Year Condo Transaction Volume I County 11 twos Su $IM+ Miami-Dade Broward Palm Beach Year-Over-Year Single-Family Transaction Volume "ns" " Miami-Dade -3.7% + 10.5% Broward NEW YORK CITY 30% SAN FRANCISCO 11 % LOS ANGELES 10% CHICAGO 8% SEATTLE 5% BOSTON 4% ATLANTA 3% DENVER ALL OTHERS 25% Source: o veBuddha, Feb 9, 2021. +19.5% + 15.0% +16.0% + 175.9% + 184.2% + 117.4% Palm Beach +3.3% Source:. Analytics Miami, Mord 2021. February 2070 vs. February 202l +188.2% +100.0% + 79.6% FIGURE 7. TOP ORIGINATION CITIES FOR MOVES INTO MIAMI, 2020 The drivers behind the great migration into South Florida 12 DocuSign Envelope ID: 8BEA14DA-C26F -43EA-BFAE-CD7CCDD4ADD3 rc;,NCLUSIONS South Florida is Hot Word traffic on the term "Miami" has been peaking on Twitter, along with the phrases "move to Miami" and "moving to Miami" peaking on internet search engines. This activity has resonated with founders, funders, and the tech industry. Office Effects Projections on the office market are expected to outperform the U.S. Asking rents have remained stable amid the rise of new-to-market tenants expanding into the region, and Miami is the only market forecasted for rent growth over the next two years, according to CBRE Research. Off i ce Effects Take 2 A limited development pipeline will help insulate the market from downside performance. South Florida entered the recession below the 30-year average vacancy rate. Off i ce Effects Take 3 South Florida is somewhat insulated from major office occupier downsizing, due to having a smaller average tenant footprint than other primary markets. Sublease space within South Florida has remained relatively stable at just 2 .4% of the market, significantly below the average of the top ten U.S. markets, which sits at 3.7%. Apartment Metrics Solid Too A lessening supply of single-family homes will help keep multifamily assets at high occupancy. Investment fundamentals have been solid, with active capital markets activity. Miami specifically will be in the top ten over the next two years in absorption rate and vacancy decrease. CBRE Research 2021 CRE, Ic. The increasing velocity of activity toward South Florida is undeniable. From new-to-market billionaires relocating to Palm Beach, to new-to-market multifamily investors buying in Broward County, to new-to-market tech companies moving to Miami, they all combine to propel the region forward in recovery. Remarkable is that the rise in interest has been occurring in the absence of cross-border activity, long a driver of the South Florida economy. As vaccines become more widespread, international travel and investment should resume, providing yet another boost to the economy. A strong economic recovery is now underway across the country. This recovery has been elevated in South Florida, due to increase in new interest in the region. This should keep confidence high for investors of all South Florida opportunities now and onward. The drivers behind the great migration into South Florida 13 DocuSign Envelope ID : 8B EA14DA -C26F -4 3EA-BFAE -CD7CCDDA4 ADD3 BRANDON ISNER Associate Director, Thought Leadership + 1 216 334 8441 brandon .isner@ cbre.com MARC MILLER Associate Director, Field Research & Data Intelligence +1 305 381 6428 © C opyright 2021 All rights reserv ed. Info rm ation co ntained herein, including projections, hos been obtained from source s believed to be reliable, but hos not been verified fo r accura cy or com pl etene ss. CBRE, Inc. makes no guar antee, w arranty or representation about it. Any reliance on such info rmation is solely at your own risk. This info rm ation is excl usively fo r use by C BRE clients and pro fessionals and may not be repro duced without the prior w ritten perm ission of CBRE's G lobal Chief Eco nom ist. CBRE