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South Florida Office Market Report

Average Asking Rent (Price/SF)    $31.19
Vacancy Rate (%)     12.1%
Net Absorption (SF) 467,481

South Florida's office sector experienced another quarter of modest improvement, as net positive absorption totaled 467,481 square feet in the third quarter of 2017. The vacancy rate fell 40 basis points from the previous quarter to 12.1%, its lowest level in more than nine years. Although the office market remains healthy, it has slowed since peaking in 2015. The market has been recovering since 2010, and after seven consecutive years of demand outpacing supply it continued to favor landlords, which contributed to an increase in average asking rents for all asset classes in the third quarter of 2017. The overall average asking rent experienced a slight decrease of $0.08/SF to $31.19/SF, as rents from lower-tier space continued to weigh down the overall average, while activity in higher-tier Class A space led the market, making up 325,000 square feet of total absorbed space for the quarter. Development remained scarce throughout the region: Only three Class A speculative buildings are under construction, and they are all within Miami-Dade County. Several smaller, lower-tier buildings are being built in the suburban markets, a disciplined approach to development that should aid market conditions without causing any significant increase in vacancy or leaving large blocks of space available.

South Florida Industrial Market Report

Average Asking Rent (Price/SF)              $8.51
Vacancy Rate (%)               4.2%
Net Absorption (SF)         786,158

The third quarter of 2017 marked more than seven years of consecutive growth for South Florida's industrial market, as demand outpaced supply for the 30th consecutive quarter, the longest growth streak recorded in over 20 years. Over 786,000 square feet of positive net absorption shrank vacancy by 20 basis points, to settle at 4.2% from the previous quarter. Over the last 24 months, robust demand has created more than 8.0 million square feet of net absorption and has kept market occupancy above 95.0%. This demand has mostly come from healthy expansions of tenants already in the market coupled with new companies moving into the South Florida market. In spite of 3.6 million square feet of new industrial inventory being delivered, the strong leasing of these new buildings lessened the impact they otherwise would have had on vacancy. Tight market conditions translated into near-record-level asking rental rates with the $8.51/SF average just $0.04/SF shy of the top rate recorded back in third-quarter 2007.



South Florida Office Market Report
3Q17
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South Florida Industrial Market Report
3Q17
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