With office absorption still on the rise in Broward County, a lack of large vacant spaces is leading to tightening market conditions.
According to a new report from Avison Young, tenants chewed through 1.1 million square feet of office space during the second quarter, dragging vacancies down to 11.7 percent.
Those conditions also pushed rents as high as $33.91 per square foot for Class A space, continuing a gradual climb in leasing rates that’s been ongoing since at least 2012.
“Tenant demand has begun to outstrip available supply, a situation that can only be alleviated by new construction,” Avison Young wrote in the report. “Demand for space is especially strong in the sought-after submarket of Downtown Fort Lauderdale.”
In the second quarter, only 200,000 square feet of new office space was delivered and another 200,000 square feet were under construction. Similar to the situation in downtown Miami, office developers have had to compete for land that’s being rezoned for multifamily and single-family projects.
The appetite for large new space is there, as evidenced by the top five second-quarter leases all being above 20,000 square feet. Comcast signed the largest deal, taking up 91,900 square feet in the Miramar Centre Business Park, followed by MEDNAX’s agreement to occupy 37,200 square feet at Sunset Plaza in Sunrise. — Sean Stewart-Muniz