According to the www.CoStar.com, the South Florida Office market ended the fourth quarter 2016 with a vacancy rate of 10%.
The U.S. Vacancy Comparison is just slightly less than 10% but similar to the overall South Florida office market vacancy rate.
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.
Rental rates average at $29.68 per square foot with the average quoted rate within the Class-A sector was $36.28 per square foot.
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 2016 deliveries include: NSU Center for Collaborative Research, a 215,000-square-foot facility now 72% occupied, Three Brickell City Centre, a 134,552-square-foot building 100% occupied. The largest projects underway at the end of fourth quarter 2016 were American Express, a 400,000-square-foot building 100% pre-leased and 800 Waterford, a 246,085 square-foot facility that is 11% pre-leased.
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). The U.S. Price/ SF is near $260 per square foot which makes the South Florida market overall more affordable.
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 South Florida office market overall rate lower about 50 basis points.
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 three largest (dollar amount) transactions throughout South Florida since the fourth quarter 2016.
Blog written by Ceiliah Epner
