Office rents in Miami’s urban core are dropping despite significant occupancy gains, according to a report from real estate firm CBRE.
Of 13 major U.S. office markets surveyed by CBRE, Miami was the only one to report a drop in rents during the third quarter, Daily Business Review reported. Asking rents for the entire metropolitan Miami area fell 10 cents to $30.11 per square foot. Owners of downtown Miami office buildings reduced asking rents by 23 cents to $33.35 per square foot.
Miami also had the largest decline in vacancy rates of any surveyed office market. Its overall rate fell from 17.4 percent to 16.6 percent. Downtown vacancies dropped from 19.1 percent to 18.2 percent.
CBRE senior vice president Maggie Kurtz attributed the reduced asking rents and vacancies to tenants in lower-class buildings seeking to move into nicer offices. That has resulted in landlords of the lower-class buildings significantly dropping asking rents to maintain their existing tenant base or fill vacancies. [Daily Business Review] — Eric Kalis