No End in Sight for Miami-Dade's Rising Office Vacancies

MIAMI-A sluggish economy at home and in South America continue to negatively impact the Miami-Dade office market. Leasing activity is down 16% from the 2001 second quarter.

For the eighth consecutive quarter, vacancy rates rose and now stand at 17.5%, its highest point since 1994, according to second quarter office reports from Cushman & Wakefield of Inc.

The Kendall/South Dade and Coconut Grove areas are the tightest markets with respective 6.7% vacancies and average quoted rents of $25.29 per sf; and 6.9% at $30.16 sf.

Neither area has any new office developments under construction and out of the two, only Coconut Grove has any newly completed space, with 19,000 sf.

The central business district has a 15.7% vacancy at $32.70 per sf average quotes rents, while Downtown Miami has a 15% vacancy at $32.20 per sf average rents. The upscale Brickell market is holding at 16.6% vacancy and average quoted rents of $32.96 per sf.

Some of the market’s biggest vacancies are around the airport. Airport/West Dade has a 20.8% vacancy at $25 per sf average rents while East Airport is at 28.2% vacancy.

“Corporate America continues to sit on the sideline and the decline in the economy in South America is certainly negatively impacting us,” Peter Harrison, senior managing director of Florida at Cushman & Wakefield, tells Globest.com. “I think we’ll see a continuation of this trend because corporate financing directors just aren’t ready to pull the trigger on new spaces or expansion.”

The highest vacancy is Miami Beach at 28.4%, a 9.3% increase over the 2001 second quarter. Average quoted rent is $34.05 per sf. Despite the statistics, the current rate of $23.23 per sf is almost a $1 per-sf-increase from the 2001 second quarter.