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South Florida Office Market Report

Average Asking Rent (Price/SF)    $31.59
Vacancy Rate (%)     12.3%
Net Absorption (SF) (107,392)

South Florida's office market witnessed supply overtake demand for the first time in nine years, as 107,392 square feet was negatively absorbed in the first quarter of 2018. This slight correction cooled off the longest period of growth in the market's recorded history and may be a sign of changing tides. The vacancy rate inched upward 40 basis points from the previous quarter to 12.3% but remained 30 basis points below the 12.6% rate recorded one year ago. The market for higher-end space continued to grow, as Class A space held onto the top spot for demand, outperforming the rest of the market with over 180,600 square feet of positive net absorption. This quarter's correction was the result of second-tier space returning to the market, as the Class B segment observed over 257,900 square feet of negative absorption. The Class C segment also saw a return of supply, totaling 30,063 square feet of negative net absorption. Despite this hiccup, landlords apparently still have the upper hand in negotiations, as the overall average asking rent increased $0.17/SF to $31.59/SF during the first quarter. Broward County held onto the lowest vacancy in the region, while Miami-Dade was the only market where demand exceeded supply.

South Florida Industrial Market Report

Average Asking Rent (Price/SF)              $8.07
Vacancy Rate (%)               4.3%
Net Absorption (SF)        712,671

The market grew in the first quarter of 2018, although much less than in previous years, as positive net absorption nearly exceeded 712,000 square feet. This was the slowest start in four years and half the net absorption recorded one year ago. Demand for industrial space in Miami soared above demand in the Broward and Palm Beach markets, while the addition of more than 1.4 million square feet of new industrial inventory during the first three months of the year pushed vacancy up 40 basis points from the previous quarter to 4.3%. The development boom of the past 12 months also increased vacancy 50 basis points from the 3.8% rate recorded one year ago. Despite all of the construction underway in Miami and Broward County, demand growth has kept occupancy above the 95.0% mark, indicating that market fundamentals remained strong. The quoted average asking rent increased for the region and pushed past the $8.00/SF mark to its highest level in recorded history. South Florida's tight market conditions coupled with the delivery of higher-end distribution space translated into slight gains in asking rents, as the significant increases that had previously occurred in second-tier space slowed. The overall average increased by $0.19/SF to $8.07/SF from one year ago, as warehouse/distribution space remained level from $7.18/SF, while general industrial space saw the largest year-over-year increase of $0.44/SF to $7.99/SF.



South Florida Office Market Report
1Q18
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South Florida Industrial Market Report
1Q18
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