November 29, 2017
MIAMI – Strong office demand in Miami reflects the market’s robust job growth, with the unemployment rate at 4.6 percent, the lowest level in a decade. According to Transwestern’s third-quarter 2017 Miami office market report, demand pushed rental rates to a new record high of $35.77 per square foot in Miami-Dade County, and Class A asking rates now average over $50 per square foot in the Brickell and Aventura submarkets.
“Although pricing trends indicate another record year for Class A landlords achieving true rental rate growth, some tenants are considering relocating to more cost-effective alternatives as opposed to remaining in their current spaces,” said Glenn H. Gregory, Managing Director of Tranwestern’s office leasing group in Miami.
Third-quarter office vacancy is at 12.6 percent, up slightly from second quarter, which provided the lowest vacancy reported in Miami-Dade County since 2007. The only new product delivered this quarter was the 256,085-square-foot Waterford at Blue Lagoon, and 592,083 square feet of office product remain under construction across four submarkets. Slightly above second quarter demand, 126,535 square feet was absorbed in Miami-Dade’s office market in the third quarter, contributing to a year-to-date total of 348,845 square feet.
“Absorption in Miami-Dade has already more than doubled 2016’s annual absorption, illustrating the market’s healthy demand,” said Keith Pierce, Transwestern’s Senior Research Manager overseeing the Southeast U.S. “Speculative office development across Miami-Dade County has increased significantly to meet the demand, with 2017 boasting the highest levels of new construction in the market since 2010.”
Additional highlights from Transwestern’s third-quarter Miami office report include:
· Cumulatively, the five projects under construction in Downtown Miami, Coral Gables, Aventura, and Coconut Grove are approximately 37 percent pre-leased.
· Third-quarter vacancy declined in several submarkets, including Brickell at 12.2 percent, Coral Gables at 8.9 percent, and Miami Airport at 11.1 percent.
· Demand has risen in each quarter this year, remaining in a consistent range of 100,000 to 125,000 square feet per quarter.
· The Coral Gables submarket reported the strongest demand in Miami-Dade County for third-quarter 2017, while year-to-date demand is most robust in Brickell.
· In fourth quarter 2017, the market will add 318,00 square feet of office product, which is approximately 50 percent pre-leased.
Download the full report at: https://tinyurl.com/transwestern-miami3Q2017Office
Transwestern is a privately held real estate firm of collaborative entrepreneurs who deliver a higher level of personalized service – the Transwestern Experience. Specializing in Agency Leasing, Tenant Advisory, Capital Markets, Asset Services and Research, our fully integrated global enterprise adds value for investors, owners and occupiers of all commercial property types. We leverage market insights and operational expertise from members of the Transwestern family of companies specializing in development, real estate investment management and research. Based in Houston, Transwestern has 35 U.S. offices and assists clients through more than 180 offices in 37 countries as part of a strategic alliance with BNP Paribas Real Estate. Experience Extraordinary at transwestern.com and @Transwestern. For updates from the Southeast region, follow @TranswesternSE.