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South Florida Market Reports

South Florida Office Market Report

Average Asking Rent (Price/SF)    $32.90
Vacancy Rate (%)       12.0%
Net Absorption (SF)   (226,426)

South Florida's office market slowed significantly in 2018, as decelerating demand growth in the fourth quarter helped supply outpace demand in the region for the first time in seven years. Consequently, annual net positive absorption totaled a little more than 337,000 square feet, a marked decrease from the 1.5 million square feet tallied one year ago. The vacancy rate rose 20 basis points year-over-year to 12.0%, as remaining vacant speculative space from the few construction completions negated any positive net absorption for the year. The office market appeared to show signs of balance after almost nine years of recovery and growth. The market's lower vacancy rate along with limited speculative construction during this economic upswing strengthened the influence of landlords during lease negotiations. The overall average asking rent increased $1.54/SF year-over-year to a high of $32.90/SF, which held for two consecutive quarters. Development remained disciplined with 12 buildings totaling more than 1.0 million square feet delivered throughout 2018, while another 12 totaling more than 1.2 million square feet remained under construction in South Florida. Most development remained within Miami-Dade County, while Broward and Palm Beach County continued to take a controlled approach to the construction of new office buildings.

South Florida Industrial Market Report

Average Asking Rent (Price/SF)              $8.75
Vacancy Rate (%)                3.9%
Net Absorption (SF)          462,630

The past year saw demand outpace supply at a healthy pace, as almost 4.3 million square feet of positive net absorption was posted for all of 2018, a slight increase from the 4.1 million square feet absorbed one year ago. The region's industrial sector saw another durable performance, while robust construction activity still pushed vacancy up 20 basis points from one year ago to settle at 3.9%. This was a minimal increase, considering more than 4.7 million square feet of new inventory was delivered in South Florida throughout the year. Notably, demand slowed in the fourth quarter, as its 462,630 square feet of positive net absorption was significantly less than the more than 1.0 million square feet recorded in each of the previous three quarters. The increased need for space mostly came from expansions by companies already in the market combined with the steady demand coming from the continuous stream of new companies entering the market in recent years. Prolonged tight conditions translated into an asking average rental rate of $8.75/SF, surpassing the record average rate of $8.54/SF recorded in 2007. This can be attributed to the warehouse/distribution segment also breaking its previous high of $7.62/SF from 2008, to settle at $7.95/SF at the close of 2018.



South Florida Office Market Report
4Q18
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South Florida Industrial Market Report
4Q18
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