Hot Office Market Continues in S. Florida
MIAMI-The South Florida office market is experiencing continued tightening with decreased vacancy and rising rental rates, according to recently issued market reports.
According to a Studley first quarter 2006 South Florida office market report, decreasing availability and increasing rents is a trend that has been occurring for 11 quarters. During the first quarter, the vacancy rate was 11.2%, down by 1.2 percentage points for the quarter and by 3.5 percentage points for the year. South Florida’s class A availability rate was 13.2%, which reflects a decrease for the both the quarter and the year, the report notes.
According to the CB Richard Ellis Florida market perspective for year-end 2005, all six Florida markets tracked posted suburban vacancy rates well below the US rate of 14.6% for fourth quarter 2005. Much of the development and leasing activity is in the suburbs where lower rents and more expansion room can be found. Central business districts are also strong, with Miami experiencing a 12.7% vacancy rate, which is below the US average.
Brokers note that the real estate fundamentals are strong in South Florida, with continued demand for space and little product on the market. They add that many available development sites are being acquired for residential, rather than commercial use. “Broward County is going like gangbusters,” says Jeff Holding, managing director of the Broward County office for CB Richard Ellis. “Over the next few months it’s going to be a tough road for tenants.”
One of the biggest events of the quarter was Palm Beach County Commission’s approval of the City of Jupiter’s proposal to house the Scripps Research Institute at Florida Atlantic University’s Abacoa campus. The first phase of the project will include construction of 364,000 sf of laboratories on 30 acres. Several developers reacted quickly to the decision. One developer, Bruce Rendina, said he has received approval to proceed with development of 177,000 sf of office space. Catalfumo Development is marketing two parcels in Palm Beach Gardens for creation of more than one million sf of research and development space.