According to the www.CoStar.com, the Miami Office market ended first quarter 2017 with an overall vacancy rate of 9.1% (down over previous quarter 9.3%), rental rates ended at $33.73 per square foot (an increase over previous quarter), two new medical office buildings were completed totaling 151,614 square feet, 293,605 square feet were absorbed, and 1,882,673 square feet are still under construction.
Downtown Miami has a total of 81 office buildings with 11,672,880 square feet, 16.7% vacancy, two buildings under construction with 318,000 square feet and an average quoted rental rate of $37.91 per square foot.
Brickell has a total of 71 office buildings with 1,094,422 square feet, 11.5% vacancy, two buildings under construction with 145,000 square feet and an average quoted rental rate of $43.35 per square foot.
Miami Beach has a total of 159 office buildings with 4,467,435 square feet, 5.5% vacancy, one building under construction with 13,800 square feet and an average quoted rental rate of $41.53 per square foot.
Coconut Grove has a total of 99 office buildings with 2,150,113 square feet, 9.6% vacancy, one building was completed with 106,000 square feet and an average quoted rental rate of $37.65 per square foot.
Coral Way has a total of 225 office buildings with 2,353,717 square feet, 3.2% vacancy, two buildings under construction with 54,912 square feet and an average quoted rental rate of $25.77 per square foot.
Coral Gables has a total of 440 office buildings with 10,959,617 square feet, 8.0% vacancy, five buildings under construction with 309,970 square feet and an average quoted rental rate of $38.68 per square foot.
Aventura has a total of 46 office buildings with 1,864,443 square feet, 6.5% vacancy, four buildings under construction with 198,002 square feet and an average quoted rental rate of $43.60 per square foot.
The U.S. Vacancy Comparison is just slightly less than 10% but similar to the overall South Florida office market vacancy rate . In Miami Class-A office projects reported a vacancy rate of 12.8%, Class-B 9.6% and Class-C at 4.0%. The overall vacancy rate in Miami’s central business district was 14.4% and in the suburban markets 7.7%.
The total South Florida office market per Costar.com statistics consist of 11,218 buildings. The net absorption totaling positive 673,514 square feet. Vacant sublease space increased in the fourth quarter, ending the quarter at 587,195 square feet.
The total Miami office market segmented consists of 101,734,876 square feet in 4,333 buildings. here were 154 owner-occupied buildings accounting for 5,861,842 square feet of office space. The net absorption totaling positive 293,605 square feet.
Rental rates average at $33.73 per square foot ( a 0.9% increase from the 4th Q. 2016) with the average quoted rate within the Class-A sector was $41.09 per square foot, Class-B $29.46, and Class-C rates at $26.64. The average quoted asking rental rate in Miami-Dade County’s central business district was $39.73 and $31.00 in the suburban markets.
Based on historical rental rates the overall market in all office classes appear to be in an upward trend.
A total of four buildings delivered to the market totaling 91,450 square feet, with 2,760,943 square feet still under construction. The notable first quarter 2017 deliveries include: Mercy Medical Arts Building, a 106,000-square-foot facility 0% occupied and Baptist Health of South Florida in Kendall, a 45-614-square-foot building 100% occupied.
The largest projects underway at the end of first quarter 2017 are 800 Waterford, a 246,085-square-foot building with 21% of its space pre-leased, and Two Miami Central, a 194,352- square-foot facility that is 50% pre-leased. The largest (3) projects underway at the end of first quarter 2017 in Miami are the following:
South Florida In the third quarter, 34 office buildings with a total of 3,256,551 square feet closed with a total volume of $773,607,800 and the average price per square foot equated to $237 per square foot. The total office building sales activity and price per square foot in 2016 was up compared to 2015 (price per square foot averaged $228).
Miami In the fourth quarter 2016, 12 office transactions closed with a total volume of $747,055,000. The 12 buildings had an average price per square foot equated to $355 per square foot. Compared to 2016, the market saw 42 office sales transactions an average price per square foot of $290 per square foot.
The U.S. Price/ SF is near $260 per square foot which makes the South Florida market overall more affordable at $237 and the segmented Miami market higher than both at $355 per square foot.
Cap rates have been higher in 2016, averaging 6.53% compared to the same period in 2015 when they averaged 6.41%. Based on fourth quarter 2016 data from CoStar, (58) office buildings sold in South Florida that ranged in size 50,000 to 249,000 square feet with an average Cap Rate of 7.00%.
The U.S. Cap Rate Comparison is over 7.00% which makes the Miami office market overall rate lower about 25 basis points near 6.75%. Overall cap rates in 2016 averaging 6.10% compared in 2015 when they averaged 5.32%.
Top leasing activity (based on leased square deals) include the following top (20) lease deals.
One of the largest transactions occurred in December 2016, the sale of Southeast Financial Center in downtown Miami. This 1,225,000-square- foot office building sold for $516,600,000, or $421.71 per square foot. The images below from CoStar.com represent the top six largest (dollar amount) transactions throughout Miami since the fourth quarter 2016.