The 2Q 2017 Miami Occupier & Pricing Trend Report Documents Single-Digit Vacancies, Double-Digit Rental Rate Growth and the Most Active Development Pipeline Since 2010
The comprehensive report, authored by Cushman & Wakefield Research, provides valuable insight into the factors driving real estate fundamentals in the dynamic Miami office market. The report delineates the Miami office market into CBD (Brickell, Downtown and Wynwood/Midtown/Design District) and suburban (Aventura, Coconut Grove, Coral Gables, Kendall/South Dade, Airport West and Miami Beach) submarkets.
Key findings of the report can be found below:
- Landlords sustained their leverage at mid-year, fueled by firm market fundamentals.
- Miami’s prime office-using employment sector added more than 168,000 jobs, up 1.3% year-over-year.
- The CBD’s Brickell submarket posted its first single-digit vacancy rate (9.4%) since 2009.
- Four suburban submarkets maintained their single digit Class A rates — Aventura, Coconut Grove, Airport West and Miami Beach.
- Pricing trends continued their upward direction. Since 2007, Class A rental rates were up by 13.0% while Class B rental rates posted a 14.0% gain.
- Miami’s largest contiguous Class A spaces were located in four of the Downtown submarket’s seven towers. These availabilities ranged from ±79,000 to ±130,000 square feet.
- Over 860,000 square feet of office product was under construction in the Miami market, the most since 2010. Of this space, 37% was pre-leased.
- 2017 CBD demand generators came from tenants in the legal, real estate, business and finance industries.
- 2017 suburban generators came from tenants in the real estate, healthcare, finance and manufacturing sectors.
- The Wynwood, Midtown and Design District submarkets are poised for 1.7 million square feet of office development.
“The Miami-Dade office market continues to improve and is a landlord’s market in several major submarkets,” said Cushman & Wakefield Vice Chairman Brian Gale. “Brickell, Aventura, Coconut Grove, Miami Beach and Airport West all have single-digit vacancies, and rents continue to climb in those submarkets.”
“Miami is the epicenter for multi-national corporations doing business in Latin America and the Caribbean, and that trend will continue for the foreseeable future,” added Gale. “New-to-market tenants have leased over 1.5 million square feet of office space in the last few years, which is fueling the office market. It’s not just musical chairs. There are quite a few new-to-market tenants that are currently scouring Miami.”
Gale also highlighted increased demand for office product providing easy access to public transportation, given the region’s burgeoning population and infrastructure constraints.
“Office development projects in close proximity to mass transit are going to be the wave of the future,” said Gale.
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 45,000 employees in more than 70 countries help occupiers and investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. 2017 marks the 100-year anniversary of the Cushman & Wakefield brand. 100 years of taking our clients’ ideas and putting them into action. To learn more, visit www.cushwakecentennial.com, www.cushmanwakefield.com or follow @CushWake on Twitter.