Airport/West Pacing Strong Miami-Dade County Office Market

MIAMI-RealData Information Systems’ latest Mami-Dade office market profile reveals generally shrinking vacancies and climbing rental rates. According to the firm’s latest statistics, the county’s direct office vacancy rate has fallen from 10.2% to 8.7% so far this year. Even factoring in available sublease space, the vacancy rate is just 9.2%.

Meanwhile, the average office rental rate has risen from $22.36 per sf to $22.97 per sf.

This year’s total absorption through September was 775,603 sf, the bulk of it in the Airport/West Dade area. Even though it represents only 21.6% of the county’s office inventory and 30% of its available vacant footage, Airport/West Dade accounted for 47% of Miami-Dade’s total office absorption during this year’s January-September period.

Nevertheless, this submarket still had 783,077 sf of office vacancies at the close of the third quarter, for an 11.9% vacancy rate. The county’s tightest submarkets were Coconut Grove and Brickell with vacancy rates of 1.2% and 3.3%, respectively.

Entering this year’s final three months, RealData counted more than 2.9 million sf of office product under construction, with 32% of that preleased. Another 2.2 million sf of proposed projects had yet to start.

By year-end, 860,917 sf of new space is expected to come on stream, of which 63% is already committed. Scheduled to begin occupancy during the final three months of 2000 are the 505,000-sf Barclays Financial Center in the Brickell submarket that is reported to be about 88% preleased, and the still unleased Doral Concourse in Airport/West Dade.

In RealData’s view, the Miami-Dade office market appears to be on track for more than one million sf of net absorption by year-end. It also appears reasonable to the firm’s researchers that 2000 will close out with an average office vacancy rate of around 10% and average per sf rents 3% to 3.5% higher than a year ago.

As for next year, the county’s office market is seen growing by some one million sf of new spec multi-tenant space, not including the 170,000-sf Visa International Building. In 2002, another 1.8 million sf are planned for delivery.