Not South Florida’s year for real estate, economist says
The housing market in South Florida — and in the rest of the state as well — will decline through the rest of 2006, according to the National Association of Realtors’ chief economist. David Lereah said in a recent speech in West Palm Beach that price increases for existing homes in South Florida will fall from regular 25 percent and 30 percent spikes to increases of about 5 percent, according to the South Florida Sun-Sentinel newspaper. He also said sales declines will continue at double-digit percentages as inventory in the region continues to increase. But not all the news is bad: Lereah also predicted that a strong economy and still generally low interest rates would help spur a housing market turnaround in the middle of 2007.
Miami hotel rates up, but summer challenges ahead
Only in New York City can you find more expensive hotel room rates than in Miami-Dade County. The average rate there in March was $179 a night, the Miami Herald reported, based on a study by Smith Travel Research. (In Manhattan, the average room rate hovers well above $200.) A booming tourism season and the continued conversion of hotel space to condos is helping drive room rates in Miami-Dade upward, even at the higher end. The oceanfront Ritz-Carlton Key Biscayne, for instance, rented suites for $2,000 a night, the Herald reported, and still reached 97 percent occupancy in March. But the start of hurricane season June 1 and the closing of several hotels for renovations, including most of Miami Beach’s mammoth Fontainebleau, could spark a summer downturn in the industry.
Palm Beach, Broward office markets tightest in years
Like in Miami-Dade, the office markets in Palm Beach and Broward counties continue to tighten. Vacancy rates are dropping into the summer and rents are going up as a scarcity of fresh office development drives competition for existing space, the Sun-Sentinel reported. By the middle of spring, vacancy rates in both Broward and Palm Beach had hit their lowest levels in at least four years, the paper said. Rates dropped to around 12 percent in the two counties. The average office rent for the best space in Palm Beach County was $31.60 a foot in the first quarter, up 4.5 percent from the fourth quarter of 2005, according to a report by brokerage Cushman & Wakefield. Broward County’s rental rate increased similarly to $28.89 a square foot.
Downtown Miami commercial tenants lease low, report shows
The vast majority of downtown Miami commercial tenants lease less than 2,500 square feet of space. Out of 1,244 downtown tenants, 739 are leasing 2,499 square feet or less, according to a report by the Downtown Development Authority and the Florida International University Metropolitan Center. The report was released as part of the authority’s May newsletter.
Fifteen commercial tenants in downtown Miami lease 75,000 square feet of space or more, and nine lease between 50,000 and 74,999 square feet, the report found. The majority of commercial tenants, though, spill over spaces much smaller than that.
The overall office vacancy rate in downtown was 11.8 percent in the middle of 2005, according to the report, a 5 percent decrease from the same time in 2004.
Law firms are the dominant tenants downtown, filling 30 percent of available commercial space there, the report found.
Performing arts center spawns Miami development wave
Residential and commercial developments are popping up around the nearly completed Miami Performing Arts Center. At least 22 major projects are under construction, approved or proposed in the area surrounding the center’s twin halls, the Miami Herald reported. The developments are going up along Biscayne Boulevard and Biscayne Bay, on the site of the shuttered Omni Mall, and in the largely dilapidated blocks west and north of the new arts center. These projects include nearly 13,000 residential units, some in condo towers as tall as 72 stories, and three major shopping centers with hundreds of thousands of square feet of retail space, all creating what the Herald described in April as a dense city within a city.