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South Florida Office Market Report

Average Asking Rent (Price/SF)    $31.52
Vacancy Rate (%)     11.8%
Net Absorption (SF) 428,542

South Florida's office market witnessed another strong year, as demand held steady during the fourth quarter and boosted the annual total to over 1.5 million square feet, falling just short of the 1.7 million square feet absorbed one year ago. The vacancy rate dropped 100 basis points year-over-year to 11.8%, its lowest level since 2007. The market recovered from the Great Recession and has been in growth mode for the past three years. Shrinking vacancy rates strengthened the influence of landlords during lease negotiations, as average asking rates surpassed pre-recession record levels. The overall average asking rent increased $0.95/SF year-over-year to $31.52/SF. Miami-Dade reported the lowest vacancy in the region, barely maintaining its lead over Broward County. Palm Beach continued to chip away at excess space lingering from the recession, with vacancy dipping to its lowest point in over a decade. Development remained scarce with only four buildings completed in 2017, and most of the space was delivered pre-leased. No major speculative buildings broke ground during the year, and only a handful of smaller office buildings were built throughout the region. Developers remained hesitant to break ground on office inventory, as multihousing projects continued to dominate interest.

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
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South Florida Industrial Market Report
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