Miami’s office market going strong: Avison Young
A new report from commercial brokerage Avison Young shows that Miami’s office market had a healthy first half of this year.
Asking rental rates in both the suburban and downtown submarkets are growing, while the metropolitan area leads the state for space absorption.
Rents in downtown Miami grew 3.6 percent to an average of $41 per square foot, while suburban Miami-Dade County saw a slightly larger increase of 5.3 percent to $37 per square foot. Both of those figures were measured by mid-year 2015, and are compared to the same time period last year.
In addition to those factors, Miami is seeing a bevy of new office space under construction. A total of 726,900 square feet of office space was under construction as of mid-2015, up from 557,000 square feet the year before.
Projects like Brickell City Centre, which will include 260,000 square feet of office space, Two MiamiCentral with 215,000 square feet and Panorama Tower with 50,000 square feet, are aiming to fill the void in supply that advisers voiced concern over earlier this year.
As far as absorption goes, suburban markets sucked up 684,000 square feet of space between the third quarter of 2014 and the second half of 2015. Downtown Miami saw 250,000 square feet of absorption during the same time period.
Suburban vacancy rates are closing in on 10 percent, and downtown rates are slightly above 15 percent, according to the report.
With these new projects in the pipeline, brokers are hoping the increase in supply will be able to match the market’s demand that has consistently driven vacancy rates down over the last few years.