Transaction volume has picked up so Miami brokers are optimistic that the bad times are behind us. You have to love a real estate broker – we are the world’s eternal optimistics. We are seeing trends that office tenants still have opportunities to take advantage of market conditions, however, the great concessions being offered last year are fading away. On the industrial side, their recovery began last year and now they have vacancy rates below 8% for the first time in over two years.
Our first quarter numbers are showing that the Miami office market has finally stabilized. Although we have a negative absorption of 118,065 sf, this was expected as several large tenants physically moved into their new locations. Downtown Miami was hardest hit by this event.
Our asking rent average is an interesting number because it’s the average price of the vacant space. So if we have lots of vacant Class A and Class B space, the number is skewed that way. If the vacant space is mostly Class C, the pendulum swings the other way. We are showing that increased competition from the availability of Class A and Class B product continues to place pressure on Class C office to be more competitive.
Another positive sign is that unemployment is beginning to drop. Last year Miami hit 13%. We have now dropped to 11.8%. Florida is at 11.0% but we are still lagging behind the national unemployment which is at 9.8%. Our research department theorizes that some of this decline in unemployment is due to people no longer filing or qualifying for unemployment benefits.
Indicators are showing that Miami is emerging from the other side of the Great Recession. With the exciting expansion of the Port of Miami, the Miami economy should continue to recover and prosper. Is your company poised for this? Call me to discuss creative ideas on how to grow your business without increasing your real estate costs. If you would like the full market report, please shoot me an email at email@example.com