MARKETBEAT

Miami-Dade
Office Q1 2018

MIAMI-DADE OFFICE
Economy
Miami-Dade started 2018 on an encouraging note with all key economic
Economic Indicators indicators in positive territory. The market finished with an
12-Month unemployment rate of 4.8% down -20 basis points (bps) year-over-year
Q1 17 Q1 18
Forecast with the addition of 17,500 jobs, a +1.5% increase in 2017. New
Miami-Dade Employment 1.2M 1.2M positions in the Professional & Business Services sector, a major user of
Miami-Dade Unemployment 5.0% 4.8% office space, rose by +5,800 jobs, or +3.4% in the last 12 months.

U.S. Unemployment 4.7% 4.1%

Market Overview
Miami-Dade’s office market flourished in the first quarter of 2018 with
*Numbers above are monthly figures, Feb 2018, FL Dept. Economic OPP.
existing and new-to-market companies fueling demand for space and
Market Indicators (Overall, All Classes) sparking new construction. Co-working space exploded and notably
impacted the market, totaling 1.4 million square feet (msf) leased or
12-Month
Q1 17 Q1 18 3.0% of the office market’s total inventory. Direct vacancy in the overall
Forecast
office market increased slightly by +10 bps quarter-over-quarter to
Vacancy 12.5% 12.1%
+11.5%, indicating tenant demand remained solid.
YTD Net Absorption (sf) 107k 182k

Under Construction (sf) 1.3M 582k Direct rental rates rose by +3.7% to $38.60 per square foot (psf) in the
first quarter 2018 with Class A direct rental rates topping $45.71 psf
Average Asking Rent* $37.21 $38.49
market-wide. Smaller submarkets saw some of the highest percentage
*Rental rates reflect gross asking $psf/year rent growth as new construction pushed asking rates to historic highs.
For the Miami CBD, including both Downtown and Brickell Avenue,
Overall Net Absorption/Overall Asking Rent Class A direct rents remained stable, down -1.0% to $50.36. The slight
decrease was due to some prime spaces in Downtown being absorbed,
4-QTR TRAILING AVERAGE
allowing lower-priced vacancies to price the market.
$50.00
300,000 Leasing activity was strong with 653,000 square feet (sf) for first quarter
250,000 $40.00 2018. Preleasing for projects under construction or recently completed
accounted for 15.0% of all activity. Large and small suburban office
200,000 $30.00 submarkets saw the most transactions as tenant demand in the suburbs
150,000 remained higher due to plentiful space options, less traffic issues and
$20.00 lower cost parking options than in the CBD.
100,000
$10.00 New office construction was a major factor for growth in Miami-Dade.
50,000
New completions in the first quarter of 2018 totaled nearly 207,000 sf
0 $0.00 with 46.0% of the space preleased. Projects in Coral Gables and the
2014 2015 2016 2017 2018
Northeast Dade submarkets helped push rental rates to cycle highs.
Net Absorption, MSF Asking Rent, $ PSF There was an additional 582,000 sf under construction that was 50.0%
preleased in both the CBD and suburban submarkets. The second office
tower in the larger MiamiCentral mixed-use project should complete in
Overall Vacancy the second quarter of 2018 in time for the new fast-moving Brightline
train service to start to Fort Lauderdale and West Palm Beach..
20%
Outlook
16% The office market in Miami-Dade ended first quarter 2018 on solid
footing, setting the stage for growth through the rest of 2018. Job growth
12% as well as confidence in the overall economy should see office
5-Year Historical Average = 13.7%
fundamentals improve further. The completion of MiamiCentral station
8% will help to maintain positive momentum in the CBD and benefit other
projects throughout the market. Cushman & Wakefield anticipates
4% further increases in office asking rents on strong tenant demand and the
addition of new supply options in both the CBD and major suburban
0% submarkets.
2014 2015 2016 2017 2018
cushmanwakefield.com
 MARKETBEAT

Miami-Dade
Office Q1 2018

CURRENT QTR YTD YTD OVERALL OVERALL

SUBLET DIRECT OVERALL UNDER
INVENTORY OVERALL NET OVERALL NET LEASING AVERAGE AVERAGE
SUBMARKET VACANT VACANT VACANCY CNSTR
(SF) ABSORPTION ABSORPTION ACTIVITY ASKING RENT ASKING RENT
(SF) (SF) RATE (SF)
(SF) (SF) (SF)** (ALL CLASSES)* (CLASS A)*

Brickell Avenue 6,576,414 96,514 691,106 12.0% -47,370 -47,370 83,666 0 $45.85 $52.70

Downtown 7,103,498 35,066 1,544,105 22.2% -12,726 -12,726 37,558 194,352 $41.85 $48.48

CBD 13,679,912 131,580 2,235,211 17.3% -60,096 -60,096 121,224 194,352 $43.18 $49.64

Coral Gables 6,526,903 45,259 555,016 9.2% 117,999 117,999 154,251 0 $40.24 $42.73

Airport West 11,316,511 117,616 942,544 9.4% 79,973 79,973 189,365 150,000 $30.48 $32.69

Coral Way 686,423 0 21,447 3.1% -4,970 -4,970 3,453 0 $33.00 $0.00

South Dade 3,645,497 1,200 428,750 11.8% -31,472 -31,472 11,476 0 $32.28 $45.86

Northeast Dade 2,558,451 2,000 214,723 8.5% 45,429 45,429 28,574 0 $41.17 $50.73

Biscayne 2,235,359 4,864 370,477 16.8% 5,125 5,125 30,721 161,964 $42.97 $54.41

Miami Lakes 1,817,834 -4,703 370,179 20.1% 4,964 4,964 64,741 0 $26.90 $30.16

Coconut Grove 1,212,518 0 55,177 4.6% -3,096 -3,096 6,988 76,000 $38.81 $40.00

S. Gables/ S. Miami 923,663 0 7,720 0.8% -1,536 -1,536 6,524 0 $29.87 $0.00

East Airport/Central Dade 541,093 0 37,254 6.9% 0 0 7,190 0 $30.00 $0.00

Miami Beach 2,181,539 4,071 193,163 9.0% 29,565 29,565 27,996 0 $46.44 $49.32

Suburban 33,645,791 179,713 3,196,450 10.0% 241,981 241,981 531,279 387,964 $35.20 $39.90

MIAMI TOTALS 47,325,703 311,293 5,431,661 12.1% 181,885 181,885 652,503 582,316 $38.49 $44.85
*Rental rates reflect gross asking $psf/year. **Leasing activity includes only new and expansion leases and does not include Renewals.

CURRENT QTR YTD YTD YTD

SUBLET DIRECT OVERALL UNDER DIRECT
INVENTORY OVERALL NET OVERALL NET LEASING CNSTR
VACANT VACANT VACANCY CNSTR AVERAGE
(SF) ABSORPTION ABSORPTION ACTIVITY COMPLETIONS
(SF) (SF) RATE (SF) ASKING RENT*
(SF) (SF) (SF) (SF)

Class A 21,160,180 237,429 2,450,661 12.7% 257,653 257,653 248,436 552,316 206,717 $45.71

Class B 17,483,182 65,651 1,980,605 11.7% -61,516 -61,516 257,153 30,000 0 $34.47

Class C 8,682,341 8,213 1,000,395 11.6% -14,252 -14,252 146,914 0 0 $29.34

Key Lease Transactions 2018

PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET
703 Waterford Way 26,000 International Air Transportation Direct Airport West
8600 NW 36th Street 18,000 Carnival Cruise Lines Direct Airport West
2555 Ponce De Leon Boulevard 16,000 Early Learning Coalition-Miami Direct Coral Gables
3415 NE 2nd Avenue 14,000 Anatomy Gym Direct Biscayne

**Does not include Renewals

Key Sales Transactions 2018

PROPERTY SF SELLER/BUYER PRICE / $PSF SUBMARKET

555 Washington Avenue 122,876 GreenOak Real Estate/KBS Realty $38,000,000 / $309 Miami Beach
1251 NW 36th Street 31,529 Centennial Express/Edenburry, LLC $6,000,000 / $190 East Airport/Central Dade
4700 Biscayne Boulevard 30,500 MGB Biscayne/Cushman School $13,500,000 / $443 Biscayne
2650 SW 27th Avenue 20,600 Marvin Kurzban/FM Capital $4,200,000 / $204 Coral Way

Cushman & Wakefield, LLC
200 South Biscayne Blvd
Miami, FL 33131
cushmanwakefield.com
For more information, contact: About Cushman & Wakefield
Chris Owen Cushman & Wakefield is a leading global real estate services firm with 45,000 employees in more than 70 countries helping
occupiers and investors optimize the value of their real estate. Cushman & Wakefield is among the largest commercial real estate
Florida Research Manager services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services
Tel: +1 407 541 4417 (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant
chris.owen@cushwake.com representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

Shanna Naseery Copyright © 2018 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple
sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or
Research Analyst representations as to its accuracy.
Tel: +1 305 533 2845
Shanna.Naseery@cushwake.com cushmanwakefield.com I