According to Newmark Grubb Knight Frank’s (“NGKF”) latest reports for South Florida, office sector fundamentals in the South Florida market continue to improve, albeit slowly, according to the latest reports on the South Florida office market from Newmark Grubb Knight Frank (NGKF).
Miami-Dade and Broward County both posted positive absorption for the quarter; however, Palm Beach County, where absorption was relatively flat, continued to struggle with vacancy over 20%. Strong demand for Class A office space throughout the region is driving overall improvement, which may fuel speculative construction in 2014.
“Across South Florida, over 7.3 million square feet of office leasing activity was tracked during 2013,” said Jon Bourbeau, vice chairman in NGKF’s Miami office. “The majority of deals continued to come from tenants already in the market in the form of expansions, renewals and relocations as companies took advantage of favorable market conditions to upgrade into higher-end buildings.
He continued, “While the markets may not see pure new requirements, many tenants are projecting revenue growth in 2014 which we expect to translate into significant organic growth via additional expansions. We may be at the starting point of the next development cycle.”
Broward County and Miami-Dade County ended the quarter with vacancy at 15.3% and 16.7%, respectively. Although Broward County still holds the lowest office vacancy rate in the region, Miami experienced the greatest year-over-year drop, which is consistent with NGKF’s earlier projections of moderate growth and improving conditions. Additional market highlights include:
MIAMI
- Class A product led market improvements as a flight to quality dominated during 2013.
- Investment sales remained level compared to 2012 with strong interest in downtown Class A buildings.
FORT LAUDERDALE – BROWARD COUNTY
- The vacancy rate is forecasted to dip below 15% during 2014, bringing it to its lowest level since year-end 2008 when the recession began to take hold.
- Office moves and space upgrades from submarket to submarket are projected to continue in 2014.
PALM BEACH COUNTY
- Maintaining the highest vacancy in South Florida since the recession began, the market has posted a rate above 20% every quarter for five consecutive years.
- UTC Fire & Safety’s move out gave back 98,000 square feet to the market in the fourth quarter of 2013.
Download the reports in their entirety by clicking on the links below:
Newmark Grubb Knight Frank’s 4Q13 Fort Lauderdale Office Market Report
Newmark Grubb Knight Frank’s 4Q13 Palm Beach Office Market Report
Newmark Grubb Knight Frank’s 4Q13 Miami Office Market Report
