The Real Deal Miami

Miami Lakes ranks as worst office market

By Alexander Britell | February 18, 2011 05:52PM

Miami Lakes is struggling more than any other submarket in Dade County, with a 25 percent total office vacancy rate through the end of 2010, according to a year-end report from Colliers International South Florida.

Miami Lakes, like many submarkets in the county, is the victim of affordable rates in newer buildings, along with aggressive landlords.

“[The Miami Lakes] market in particular has seen two things — it had a lot of office condo inventory, and, number two, a lot of people have taken advantage of the ‘flight to quality,’ whether it’s an office condo that isn’t going to be leased or an owner-user deal,” said Alex Morcate, senior analyst at Colliers.

According to Morcate, there isn’t an overabundance of Class A space available in the area, so tenants tend to leave for greener pastures to the south and to the east.

Miami Lakes has an inventory of 416,748 square feet of Class A space, compared to 1.29 million in Kendall and 5.06 million in the downtown Miami Central Business District.

The struggles of Miami Lakes come in contrast to submarkets like Coral Way, Central Miami and Kendall, each of which has a total vacancy rate below 10 percent.

Their comparative success, however, is not particularly surprising, Morcate said.

“I think those markets are doing well because they were expected to. The Coral Way submarket and others are doing a little better, but they always did.”

He said these markets were insulated before the real estate downturn, and typically had a strong presence, with a strong employee base and access to transportation.

The Central Miami submarket had the lowest vacancy rate in the county, although it should be noted that it does not have any Class A space. Among submarkets with more than 500,000 square feet of Class A space, Aventura, with a 15.4 percent vacancy rate, had the lowest vacancy in the county.

The average full-service rental rate in Miami Lakes is $23.90, according to the report. The Northeast Dade submarket had the county’s lowest rates, at $19.48.