Miami-Dade County has seen some of Florida’s largest increases for Class A office lease asking prices since the last real estate cycle — a trend that continued during this year’s third quarter, according to a new Cushman & Wakefield report.
Since the peak of the last cycle, which took place in the second quarter of 2008, asking prices for Class A office space in Miami-Dade has risen by 5.1 percent, from $38.76 per square foot to $40.75, the report said.
That means the county’s Class A office market has grown more since the last cycle than any other region’s Class A office market in Florida. The next-highest county was Palm Beach, which increased only 1.6 percent, from $36.90 to $37.45 per square foot, and Broward, which jumped 1.2 percent from $25.65 to $32.28 per square foot.
“New office construction statewide lags compared to rising tenant demand,“ Chris Owen, Cushman & Wakefield’s research manager for Florida, wrote in the report. ”While there are several pockets of larger speculative development across the state, these projects will not, for the most part, come online until 2017 at the earliest.”
More recently, South Florida’s Class A office prices have continued their upward trend compared to last year. In the third quarter, Miami-Dade grew by 1 percent to its current rate of $40.75, Broward by 1.9 percent and Palm Beach by 2.4 percent.
“Growth in rental rates across the state since the last cycle have been driven mostly by gains in the suburban markets,” Larry Richey, Cushman & Wakefield’s senior managing director and Florida market leader, wrote in the report. “For the South Florida and Tampa [central business districts], rents are comparable or slightly higher, while in Orlando and Jacksonville, there is still significant room to grow.”
According to Cushman & Wakefield, the average asking price for a Class A office lease in Tampa was $25.97 per square foot during the third quarter. For Orlando, it was $23.50, and for Jacksonville, it was $19.79. — Sean Stewart-Muniz
Check out an infographic of rising Florida asking prices below: