Miami-Dade County Office Market Report 4Q 216 Real Capital Partners Real Estate Services *Data Source CoStar Miami-Dade County Office Market Report
4Q 216 Miami-Dade County Office Market Report Overview Miami-Dade County s Vacancy Decreases to 9.4% Net Positive 35,187 SF in the Quarter The Miami-Dade County Office market ended the fourth quarter 216 with a vacancy rate of 9.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 35,187 square feet in the fourth quarter. Vacant sublease space decreased in the quarter, ending the quarter at 19,819 square feet. Rental rates ended the fourth quarter at $33.44, an increase over the previous quarter. A total of one building delivered to the market in the quarter totaling 44, square feet, with 1,768,911 square feet still under construction at the end of the quarter. Net absorption for the overall Miami-Dade County office market was positive 35,187 square feet in the fourth quarter 216. That compares to positive 349,95 square feet in the third quarter 216, positive 342,648 square feet in the second quarter 216, and negative (15,197) square feet in the first quarter 216. The Class-A office market recorded net absorption of positive 12,39 square feet in the fourth quarter 216, compared to positive 142,681 square feet in the third quarter 216, positive 13,391 in the second quarter 216, and negative (14,878) in the first quarter 216. The Class-B office market recorded net absorption of positive 67,498 square feet in the fourth quarter 216, compared to positive 117,2 square feet in the third quarter 216, positive 235,911 in the second quarter 216, and positive 6,686 in the first quarter 216. The Class-B office market recorded net absorption of positive 67,498 square feet in the fourth quarter 216, compared to positive 117,2 square feet in the third quarter 216, positive 235,911 in the second quarter 216, and positive 6,686 in the first quarter 216. The Class-C office market recorded net absorption of positive 117,65 square feet in the fourth quarter 216 compared to positive 89,412 square feet in the third quarter 216, positive 93,346 in the second quarter 216, and negative (52,5) in the first quarter 216. Net absorption for Miami-Dade County s central business district was positive 67,889 square feet in the fourth quarter 216. That compares to positive 42,976 square feet in the third quarter 216, negative (27,131) in the second quarter 216, and positive 5,933 in the first quarter 216. Net absorption for the suburban markets was positive 237,298 square feet in the fourth quarter 216. That compares to positive 36,119 square feet in third quarter 216, positive 369,779 in the second quarter 216, and negative (156,13) in the first quarter 216. Vacancy The office vacancy rate in the Miami-Dade County market area decreased to 9.4% at the end of the fourth quarter 216. The vacancy rate was 9.7% at the end of the third quarter 216, 1.% at the end of the second quarter 216, and 1.2% at the end of the first quarter 216. Class-A projects reported a vacancy rate of 12.7% at the end of the fourth quarter 216, 13.1% at the end of the third quarter 216, 13.6% at the end of the second quarter 216, and 13.4% at the end of the first quarter 216. Class-B projects reported a vacancy rate of 1.4% at the end of the fourth quarter 216, 1.4% at the end of the third quarter 216, 1.6% at the end of the second quarter 216, and 1.9% at the end of the first quarter 216. Class-C projects reported a vacancy rate of 4.2% at the end of the fourth quarter 216, 4.6% at the end of third quarter 216, 5.% at the end of the second quarter 216, and 5.3% at the end of the first quarter 216. Off. 35.477.9748 Cel. 35.785.7325
4Q 216 Miami-Dade County Office Market Report Overview The overall vacancy rate in Miami-Dade County s central business district at the end of the fourth quarter 216 decreased to 15.5%. The vacancy rate was 15.8% at the end of the third quarter 216, 16.% at the end of the second quarter 216, and 15.8% at the end of the first quarter 216. The vacancy rate in the suburban markets decreased to 7.9% in the fourth quarter 216. The vacancy rate was 8.2% at the end of the third quarter 216, 8.5% at the end of the second quarter 216, and 8.8% at the end of the first quarter 216. Sublease Vacancy The amount of vacant sublease space in the Miami-Dade County market decreased to 19,819 square feet by the end of the fourth quarter 216, from 241,471 square feet at the end of the third quarter 216. There was 192,1 square feet vacant at the end of the second quarter 216 and 214,465 square feet at the end of the first quarter 216. Miami-Dade County s Class-A projects reported vacant sublease space of 122,91 square feet at the end of fourth quarter 216, down from the 149,818 square feet reported at the end of the third quarter 216. There were 135,9 square feet of sublease space vacant at the end of the second quarter 216, and 127,763 square feet at the end of the first quarter 216. Class-B projects reported vacant sublease space of 64,794 square feet at the end of the fourth quarter 216, down from the 87,543 square feet reported at the end of the third quarter 216. At the end of the second quarter 216 there were 53,82 square feet, and at the end of the first quarter 216 there were 82,73 square feet vacant. Class-C projects reported decreased vacant sublease space from the third quarter 216 to the fourth quarter 216. Sublease vacancy went from 4,11 square feet to 3,934 square feet during that time. There was 2,29 square feet at the end of the second quarter 216, and 3,972 square feet at the end of the first quarter 216. Sublease vacancy in Miami-Dade County s central business district stood at 91,311 square feet at the end of the fourth quarter 216. It was 134,326 square feet at the end of the third quarter 216, 85,26 square feet at the end of the second quarter 216, and 9,323 square feet at the end of the first quarter 216. Sublease vacancy in the suburban markets ended the fourth quarter 216 at 99,58 square feet. At the end of the third quarter 216 sublease vacancy was 17,145 square feet, was 16,984 square feet at the end of the second quarter 216, and was 124,142 square feet at the end of the first quarter 216. Off. 35.477.9748 Cel. 35.785.7325
4Q 216 Miami-Dade County Office Market Report Overview Retal Rates The average quoted asking rental rate for available office space, all classes, was $33.44 per square foot per year at the end of the fourth quarter 216 in the Miami-Dade County market area. This represented a 2.% increase in quoted rental rates from the end of the third quarter 216, when rents were reported at $32.8 per square foot. The average quoted rate within the Class-A sector was $41.12 at the end of the fourth quarter 216, while Class-B rates stood at $29., and Class-C rates at $26.23. At the end of the third quarter 216, Class-A rates were $4.63 per square foot, Class-B rates were $28.67, and Class-C rates were $25.59. The average quoted asking rental rate in Miami-Dade County s CBD was $4.8 at the end of the fourth quarter 216, and $3.53 in the suburban markets. In the third quarter 216, quoted rates were $39.82 in the CBD and $3. in the suburbs. Deliveries and Construction During the fourth quarter 216, one building totaling 44, square feet were completed in the Miami-Dade County market area. This compares to two buildings totaling 38,675 square feet that were completed in the third quarter 216, two buildings totaling 16,136 square feet completed in the second quarter 216, and 37,832 square feet in three buildings completed in the first quarter 216. There were 1,768,911 square feet of office space under construction at the end of the fourth quarter 216. Some of the notable 216 deliveries include: Three Brickell City Centre, a 134,552-square-foot facility that delivered in first quarter 216 and is now 1% occupied, and Two Brickell City Centre, a 132,28-square-foot building that delivered in first quarter 216 and is now 62% occupied. The largest projects underway at the end of fourth quarter 216 were 8 Waterford, a 246,85-square-foot building with 11% of its space pre-leased, and Two MiamiCentral, a 194,352-square-foot facility that is 51% pre-leased. Sublease vacancy went from 4,11 square feet to 3,934 square feet during that time. There was 2,29 square feet at the end of the second quarter 216, and 3,972 square feet at the end of the first quarter 216. Sales Activity Tallying office building sales of 15, square feet or larger, Miami-Dade County office sales figures fell during the third quarter 216 in terms of dollar volume compared to the second quarter of 216. In the third quarter, 1 office transactions closed with a total volume of $112,515,3. The 1 buildings totaled 694,485 square feet and the average price per square foot equated to $162.1 per square foot. That compares to 12 transactions totaling $627,363,425 in the second quarter 216. The total square footage in the second quarter was 2,118,147 square feet for an average price per square foot of $296.19. Total office building sales activity in 216 was up compared to 215. In the first nine months of 216, the market saw 3 office sales transactions with a total volume of $92,86,725. The price per square foot averaged $242.57. In the same first nine months of 215, the market posted 55 transactions with a total volume of $86,168,857. The price per square foot averaged $36.4. Cap rates have been higher in 216, averaging 5.89% compared to the same period in 215 when they averaged 5.19%. One of the largest Off. 35.477.9748 Cel. 35.785.7325
4Q 216 Miami-Dade County Office Market Report Overview transactions that has occurred within the last four quarters in the Miami-Dade County market is the sale of Southeast Financial Center in Miami. This 1,225,- square-foot office building sold for $516,6,, or $421.71 per square foot. The property sold on 12/2/216. Tallying office building sales of 15, square feet or larger, Miami-Dade County office sales figures fell during the third quarter 216 in terms of dollar volume compared to the second quarter of 216. Inventory Total office inventory in the Miami-Dade County market area amounted to 1,46,867 square feet in 4,344 buildings as of the end of the fourth quarter 216. The Class-A office sector consisted of 27,81,487 square feet in 156 projects. There were 1,163 Class-B buildings totaling 46,81,932 square feet, and the Class-C sector consisted of 25,848,448 square feet in 3,25 buildings. Within the Office market there were 154 owner-occupied buildings accounting for 5,91,759 square feet of office space. Off. 35.477.9748 Cel. 35.785.7325
4Q 216 CLASS A MARKET STATISTICS Market Existing Inventory Vacancy # Blds Total RBA Direct SF Total SF Vac % YTD Net YTD Deliveries Under Const SF Quoted Rates Aventura 1 943,517 85,211 88,7 9.3% (3,76) 224,689 $47.5 Biscayne Corridor 3 699, 192,528 192,528 27.5% 13,571 $41. Brickell 15 4,969,439 59,393 639,74 12.9% 198,865 266,832 1, $49.45 Coconut Grove 4 547,332 36,224 46,11 8.4% 5,657 115,92 $38.52 Coral Gables 3 4,778,487 51,777 57,616 1.6% (2,39) 188,47 $41.7 Coral Way 1 84,248.% 41,117 $. Downtown Miami 1 5,268,82 872,279 882,533 16.8% (38,643) 318, $44.9 Kendall 15 1,757,858 315,5 328,483 18.7% (13,654) $36.91 Medley/Hialeah 6 786,962 11,661 11,661 14.1% 36,168 $26.39 Miami 9 1,115,197 14,12 14,12 9.3% 26,377 61,96 $46.24 Miami Airport 36 5,334,524 428,55 442,982 8.3% (48,759) 71,581 32,492 $32.73 Miami Beach 7 873,925 36,61 48,435 5.5% (14,756) $44.61 Miami Lakes 7 417,48 14,32 14,32 24.9% 6,38 $26.79 Miami-Dade Central County.% $. Northeast Dade 2 188,75 22,342 27,332 14.5% 33,42 58,747 $3.26 Outlying Miami-Dade Cnty.% $. South Dade.% $. West Miami 1 46,118.% $23. Totals 156 27,81,487 3,399,723 3,521,814 12.7% 71,233 338,413 1,352,531 $41.12 CLASS B MARKET STATISTICS Market Existing Inventory Vacancy # Blds Total RBA Direct SF Total SF Vac % YTD Net YTD Deliveries Under Const SF Quoted Rates Aventura 23 785,122 14,543 16,643 2.1% 1,82 54,832 $39.8 Biscayne Corridor 28 1,3,952 72,34 74,94 7.3% (8,925) 8,643 $37.38 Brickell 33 2,87,88 487,92 513,991 17.9% (78,341) 18, 45, $35.7 Coconut Grove 26 1,74,681 63,124 63,124 5.9% (16,684) 15,67 $34.89 Coral Gables 116 4,112,458 291,992 296,43 7.2% (3,895) $35.56 Coral Way 33 1,77,214 35,829 36,719 3.4% 4,358 $29.5 Downtown Miami 37 5,186,11 897,613 93,9 17.4% 8,494 $3.66 Kendall 225 6,22,131 431,467 436,341 7.% 91,768 53,614 $27.9 Medley/Hialeah 65 1,89,749 12,656 12,656 5.7% 68,83 22,136 $26.49 Miami 53 2,36,4 175,45 175,45 7.4% 29,387 44, 22,365 $33.64 Miami Airport 186 1,382,461 1,81,953 1,99,496 1.6% 29,85 41, $26. Miami Beach 67 2,439,669 137,746 137,746 5.6% 9,621 $38.32 Miami Lakes 93 2,655,98 458,278 458,278 17.3% 91,471 2,64 $22.73 Miami-Dade Central County 8 176,484.% $. Northeast Dade 78 2,447,167 398,15 398,15 16.3% 86,561 19,23 139, $25.63 Outlying Miami-Dade Cnty 5 164,443.% $. South Dade 46 1,42,898 129,722 129,722 9.2% 3,699 34,48 $24.19 West Miami 41 66,87 7,184 7,184 1.2% 19,83 $23.88 Totals 1,163 46,81,932 4,785,49 4,85,23 1.4% 427,97 212,23 416,38 $29. Off. 35.477.9748 Cel. 35.785.7325
4Q 216 CLASS C MARKET STATISTICS Market Existing Inventory Vacancy # Blds Total RBA Direct SF Total SF Vac % YTD Net YTD Deliveries Under Const SF Quoted Rates Aventura 14 138,8 12,984 12,984 9.4% (5,784) $34.25 Biscayne Corridor 9 1,31,838 65,453 65,453 6.3% 27,938 $33.38 Brickell 23 336,581 6,63 6,63 2.% $22.9 Coconut Grove 68 417,19 14,874 16,928 4.1% 8,859 $47.82 Coral Gables 296 2,69,23 63,737 63,737 3.1% 35,79 $31.49 Coral Way 193 1,23,573 1,134 1,134.8% 31,768 $23.64 Downtown Miami 34 1,239,37 134,22 134,22 1.8% (78) $23.93 Kendall 291 3,678,774 144,84 144,84 3.9% (11,84) $27.18 Medley/Hialeah 271 1,738,965 54,99 54,99 3.2% 2,351 $23.28 Miami 5 3,219,78 18,228 18,228 3.4% 21,765 $29.32 Miami Airport 197 3,55,129 84,272 86,152 2.8% 37,681 $23.38 Miami Beach 85 1,156,321 42,2 42,2 3.6% 18,84 $35.81 Miami Lakes 4 469,945 32,51 32,51 6.8% 17,76 $19.23 Miami-Dade Central County 53 259,114.% 22,538 $21.58 Northeast Dade 429 3,725,444 253,855 253,855 6.8% 1,496 $21.85 Outlying Miami-Dade Cnty 1 7,989.% $. South Dade 173 94,71 37,26 37,26 4.1% 21,53 $19.6 West Miami 267 1,196,874 1,715 1,715.9% 9,95 $19.96 Totals 3,25 25,848,448 1,76,11 1,79,945 4.2% 248,43 $26.23 TOTAL OFFICE MARKET STATISTICS Market Existing Inventory Vacancy # Blds Total RBA Direct SF Total SF Vac % YTD Net YTD Deliveries Under Const SF Quoted Rates Aventura 47 1,866,647 112,738 117,634 6.3% (25,67) 279,521 $43.86 Biscayne Corridor 121 2,761,79 33,321 332,921 12.1% 32,584 8,643 $37.69 Brickell 78 8,176,828 1,84,925 1,159,695 14.2% 12,524 284,832 145, $42.9 Coconut Grove 98 2,39,32 114,222 126,63 6.2% (2,168) 131,59 $37.49 Coral Gables 442 1,959,968 857,56 867,756 7.9% 29,586 188,47 $38.67 Coral Way 227 2,365,35 45,963 46,853 2.% 36,126 41,117 $26.47 Downtown Miami 81 11,693,562 1,93,914 1,92,455 16.4% (3,857) 318, $38.69 Kendall 531 11,656,763 891,321 99,628 7.8% 66,31 53,614 $29.47 Medley/Hialeah 342 4,335,676 268,37 268,37 6.2% 16,62 22,136 $25.72 Miami 562 6,695,377 387,393 387,393 5.8% 77,529 44, 84,271 $32.1 Miami Airport 419 18,772,114 1,594,73 1,628,63 8.7% 18,772 112,581 32,492 $28.25 Miami Beach 159 4,469,915 216,349 228,183 5.1% 94,669 $39.59 Miami Lakes 141 3,542,91 594,361 594,361 16.8% 115,557 2,64 $23.14 Miami-Dade Central County 61 435,598.% 22,538 $21.58 Northeast Dade 59 6,361,361 674,212 679,22 1.7% 13,99 19,23 139, $24.32 Outlying Miami-Dade Cnty 6 172,432.% $. South Dade 219 2,37,599 166,982 166,982 7.2% 24,752 34,48 $22.7 West Miami 39 1,849,79 17,899 17,899 1.% 29,78 $21.73 Totals 4,344 1,46,867 9,261,143 9,451,962 9.4% 846,733 55,643 1,768,911 $33.44 Off. 35.477.9748 Cel. 35.785.7325
4Q 216 HISTORICAL RENTAL RATES VACANCY BY AVAILABLE SPACE TYPE Percent of All Vacant Space in Direct vs. Sublet VACANCY BY AVAILABLE SPACE TYPE Percent of All Vacant Space by Class U.S. RENTAL RATE COMPARISON Based on Full-Service Equivalent Rental Rates FUTURE SPACE AVAILABLE Space Scheduled to be Available for Occupancy* Off. 35.477.9748 Cel. 35.785.7325