South Florida’s surge in office demand skirts Broward

South Florida’s office market is still riding a wave of Covid-era corporate migration to the Sunshine State. But it’s clear that most of the benefits are accruing to Miami-Dade and Palm Beach counties, with Broward County largely missing out.

In Miami-Dade, net office absorption jumped more than 30 percent, year-over-year, in the fourth quarter of 2022, finishing the year with nearly 200,000 square feet absorbed, according to data from Cushman & Wakefield. Palm Beach County — home to “Wall Street South” — saw its net absorption rise by 18 percent, reaching nearly 111,000 square feet.

Meanwhile, Broward County’s net absorption plunged by just over 30 percent in the fourth quarter, year-over-year, to negative 66,537 square feet, Cushman & Wakefield’s figures show. And that’s despite Broward scoring four of the top 10 office leases of the year — including the biggest: toy manufacturer Jazwares’ 134,000-square-foot lease renewal in Plantation’s Southpointe office campus.

A less dramatic example of that dynamic is visible in the changes in vacancy rates. Miami-Dade County’s office vacancy rate dropped 0.9 percentage points, year-over-year, finishing 2022 at 16.1 percent, according to Cushman & Wakefield. In Palm Beach County, the office vacancy rate dropped 1.8 percentage points, to end the year at 10.7 percent. But in Broward County, the vacancy rate increased 0.5 percentage points, reaching 17.5 percent in the last quarter of 2022.

Broward County did beat its neighbors last year in the increase in average asking rent, Cushman & Wakefield’s figures show. Average asking rent in Broward rose more than 4 percent over the course of 2022, besting Miami-Dade’s boost of 3.42 percent, and Palm Beach County’s drop of 1.5 percent.

This is the second year in a row that Broward has largely failed to capitalize on the region’s surging office market. In 2021, when net absorption jumped more than 106 percent in Miami-Dade and a staggering 2,833 percent in Palm Beach County, Broward County saw an uptick of less than 2 percent.

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