Here’s why office rents are going up in South Florida
In Miami-Dade County, rents rose to $38.30 psf in Q3 from $35.93 psf in the same period of 2018
Three things in South Florida seem certain: death, taxes and rising office rents.
In Miami-Dade County, rents rose to $38.30 per square foot in the third quarter from $35.93 per square foot in the same period of 2018. Vacancy rates dropped slightly to 9 percent from 9.1 percent, according to a report by Colliers International South Florida. Rents are rising partly as a result of new Class A office space being built across the county.
Homebuilder Lennar Corp. signed the largest new lease of the quarter for 156,000 square feet at 5505 Blue Lagoon Drive in the Miami Airport submarket. It was followed by BAC Florida Bank leasing 63,000 square feet in Coral Gables.
More office buildings are on the way with 570,000 square feet breaking ground in the third quarter, according to the report. Much of the new office space will be Class A, as Class A rents shot up to $45.18 per square foot in the third quarter from $42.92 per square foot in the third quarter of 2018.
Broward County office rents rose 8 percent, year-over-year, to $31.74 per square foot in the third quarter, while vacancy rates dropped to 9.0 percent from 9.7 percent, according to the report.
The largest lease in Broward was for doctor staffing firm Hayes Locums, which signed a 77,000-square-foot lease at Cypress Financial Center that will serve as the company’s new headquarters, according to Colliers. In Broward County, demand continues to remain strong for office buildings in downtown Fort Lauderdale. In the third quarter, Philadelphia- based Alliance HSP bought the One Financial Plaza in downtown Fort Lauderdale for $117 million.
In the northernmost part of the tri-county region, Palm Beach County rents grew to $31.81 per square foot, year-over-year, from $29.92 per square foot, driven by new office space in downtown West Palm Beach. Vacancy rates fell to 10 percent compared to 10.4 percent in the same period of the previous year, according to Colliers.
Related Group’s 360 Rosemary, a planned 300,000-square-foot Class A office building in West Palm Beach, has already started pre-leasing. The law firm Lewis, Longman & Walker signed a lease for 12,366 square feet.
The largest lease in Palm Beach County was for Kroger Co.’s online health and wellness business, Vitacost.com, for 43,000 square feet at Boca Raton Innovation Campus.