South Florida businesses looking to catch a break on their rent may have to wait another year. Office rental leasing rates rose in the tri-county area in the fourth quarter, year-over-year, according to a newly released report.
Miami’s office rents rose for the eighth quarter in a row, increasing to $43.40 from $39.10 in the fourth quarter of 2018, according to JLL’s Office Insights report. More office space is being delivered as well, including 3310 Mary Street, a Class A building in Coconut Grove with 95,000 square feet.
The news comes as some office markets across the country face headwinds after the co-working giant WeWork saw its valuation drop significantly, and it reportedly could back out of 100 leases in major U.S. markets. The co-working firm is the largest office tenant in New York City.
In Miami, demand for office space remained greater than supply, with net absorption of 120,470 square feet in 2019, according to JLL.
Broward and Palm Beach counties’ office markets also fared well in the fourth quarter. Almost 1.5 million square feet of office space is expected to be delivered in the next 12-24 months in Broward and Palm Beach, combined, according to JLL.
In Fort Lauderdale, net absorption surpassed 500,000 square feet in 2019 for the first time since the recession. Average office asking rents were $34.76 per square foot, up from $34.31 in the fourth quarter of 2018. One of the biggest leases of the year was Ultimate Software’s expansion into a 100,000-square-foot building in Sawgrass Park in Sunrise, where the company signed a 10-year lease earlier this year.
In West Palm Beach, office rents rose to $36.84 from $32.64 in the fourth quarter of 2018. Four office projects are expected to deliver nearly 800,000 square feet over the next 12-24 months – the highest amount of development activity since 2007, according to JLL.