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South Florida

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)              $8.05
Vacancy Rate (%)               3.9%
Net Absorption (SF)         979,224

The past year saw demand outstrip supply at a steady pace again, as 3.7 million square feet of positive net absorption was posted for all of 2017. This represented an absorption rate that had decreased from the previous two years but was still healthy enough to prevent the new inventory brought on by new developments from increasing vacancy significantly. The region's industrial sector saw another durable performance with vacancy rising slightly by 10 basis points from one year ago to settle at 3.9%. The increased need for space mostly came from relocations and expansions of companies already in the market. Lasting tight market conditions translated into an average asking rental rate of $8.05/SF throughout the region, a 38.0% increase from when rents were at their lowest in 2011. Strong demand has motivated owners to increase asking rates throughout South Florida, as industrial rents have almost reached their record levels from 2007.



South Florida Office Market Report
4Q17
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South Florida Industrial Market Report
4Q17
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