2019-07-11_DTZ戴德梁行_Office_Q3_2018_Miami-Dade_2页_323kb

Miami-Dade Office Market Summary Q3 2018

Core Content

The Miami-Dade office market showed resilience and strength in Q3 2018 despite the impact of new construction. The market maintained solid fundamentals with positive absorption trends and increasing rental rates, driven by strong tenant demand and strategic developments.

Key Economic Indicators

• Miami-Dade Employment: Increased by 1.9% to 1.20 million jobs in Q3 2018.
• Miami-Dade Unemployment: Decreased to 4.1%, a drop of 90 basis points (bps) year-over-year.
• U.S. Unemployment: Continued to decline to 3.9%.
• Overall Vacancy Rate: Rose to 12.9%, up 70 bps from Q3 2017.
• YTD Net Absorption (sf): Increased to 576,000 sf, showing a positive trend.
• Under Construction (sf): Increased to 1.4 million sf, but only 18.0% preleased.
• Average Asking Rent (psf/year): Rose to $38.86, up 2.9% over the 12-month period.

Market Overview

• Brickell Avenue: Vacancy rate dropped to 11.0%, down 160 bps from Q3 2017. Class A rents increased to $53.61 psf.
• Downtown: Vacancy rate rose to 23.9%, up 720 bps from Q2. Despite the increase, the market is still attractive to investors.
• CBD: Overall vacancy rate was 17.7%, with a slight increase in net absorption and a rise in average asking rents to $50.71 psf.
• Coral Gables: Vacancy rate fell to 12.0%, and Class A rents increased to $43.51 psf.
• Airport West: Vacancy rate at 10.4%, with Class A rents at $33.03 psf.
• South Dade: Vacancy rate at 11.4%, with a mix of direct and sublet vacancies.
• Suburban Market: Vacancy rate at 10.9%, with strong leasing activity and a rise in average asking rents to $35.46 psf.

Trends and Outlook

• Leasing Activity: Decreased for the third consecutive quarter, with tenants taking longer to make decisions.
• Tenant Shift: A marked shift occurred as tenants moved to suburban submarkets due to cost factors, with significant activity in Airport West Class A and South Dade Class B assets.
• New Construction: The completion of Two MiamiCentral added 81,000 sf to Downtown, increasing its vacancy rate to 25.2%.
• Rental Rate Increases: Across all classes, rental rates rose, with the most notable increases in Class A submarkets such as Miami Beach, Airport West, and Coral Gables.
• Cushman & Wakefield Outlook: Anticipates further increases in office asking rents due to strong tenant demand and new construction in both CBD and suburban submarkets.

Key Lease Transactions

Key Sales Transactions

Summary of Key Points

• Economic Strength: The Miami-Dade office market remained strong with a drop in unemployment and an increase in employment.
• Vacancy Trends: Overall vacancy increased slightly, but certain submarkets like Brickell Avenue saw significant decreases.
• Rental Rates: Asking rents increased across all classes, with the most substantial gains in Class A.
• Leasing Activity: Declined for the third consecutive quarter, with a notable shift to suburban areas.
• New Construction: Added 1.4 million sf of space, but only 18.0% was preleased.
• Investor Interest: The market remains attractive to investors despite the surplus of new space.

Conclusion

The Miami-Dade office market demonstrated strong fundamentals in Q3 2018, with positive absorption trends, increasing rental rates, and continued tenant demand. While new construction contributed to higher vacancy rates, the market's liquidity and strategic developments suggest a stable and potentially growing environment for the future.