Historically Low Unemployment Rates Spurs the Need for More Office Space in Miami-Dade
Executive Summary The office market in Miami-Dade County has remained steady since the beginning of 2018 and is showing signs of recovery in the second quarter. The vacancy rate for Miami-Dade’s office market currently sits at 9.3 percent, a 60-basis point increase year-over-year. Vacancy rates for office space have hovered around 9 percent since the end of 2016. The increase in vacancy rates are also displayed by the negative absorption of 81,569 square feet as supply in Miami-Dade currently exceeds demand. Asking rates continue to rise as gross rents currently average $35.82 per square foot, a 5 percent increase year-over-year. Class A rates are also seeing progress as gross rents currently average $42.51 per square foot, a 2 percent increase year-over-year.
Flourishing Market Conditions in Broward County Attracts New Office Development
Broward County’s office market has cooled down in the second quarter of 2018. Vacancy rates have remained below 10 percent since the beginning of 2017 and currently stand at 9.8 percent, a 30-basis point increase year-over-year. In the face of few new deliveries in 2018, 34,530 square feet of new office supply was added to Broward County. There is nearly 900,000 square feet of office space currently under construction. Downtown Fort Lauderdale remains a popular submarket for office development as a result of a low unemployment rate and strong population growth and the submarket’s transformation to a live/work/play environment.
Forward-Looking Market Conditions Prompt Speculative Office Development in Palm Beach County
Palm Beach’s office market activity has slowed down since the beginning of 2018. The vacancy rate for office space in Palm Beach County currently stands at 11 percent, a 10-basis point increase year-over-year. Industrial vacancy rates have hovered around 11 percent since the beginning of 2017 with scarce new product added to the market. Rental rates in Palm Beach County currently stand at $30.00 per square foot, a 5 percent increase year-over-year. Class A rates have continued to grow in 2018, currently averaging $34.81 per square foot, a 3 percent increase year-over-year. In