Last Tuesday I spoke at the Commercial Industrial Association of South Florida (CIASF) annual Office Market Report. It was quite an honor to be asked and we had an excellent panel. The Miami Herald put us on the front page of the Business Section. Click here for the article.
When I dug into the numbers, I came up with an interesting Market Outlook for 2014. Here are some of the highlights from my speech:
- Unemployment, according to recent figures, continues to drop. The Beacon Council just released figures that year-over-year April figures show a 200 basis point drop in unemployment (6.6% from 8.6%). From March to April, Miami-Dade added 34,600 jobs which is the state’s second largest year over year gain (Orlando beat us). These are all non-agricultural jobs. We are getting closer to our pre-recession peak.
- Landlords are seeing record-setting levels of new-to-market activity. Companies are flocking from New York, Illinois and California. Companies from these states are indicating that state income taxes are a key reason. The harsh winter in New York and Illinois didn’t help matters. Currently there is as much as 300,000 sq ft of new-to-market tenants who are either currently looking or have signed leases in the past 12 months.
- Large blocks of space are finally being absorbed. Less than 30 Class A and B buildings can handle over 30,000 SF requirements. The majority of availability is in the Downtown/Brickell area with 600 Brickell and Wells Fargo having the last remaining large blocks of space from the 2 million sq ft of new construction five years ago. There are only about 15 buildings in the county that can have 50,000 sq ft or more available.
- Typically in the US, suburban markets have accounted for 90% of the net absorption over the past year. Miami was bucking that trend over the past year until this quarter. Now I think we’ll see a better balance between the CBD and the suburbs.
There are some interesting trends in those points outlined above, so I’ll be digging deeper into some of these in the weeks ahead. Look for me in the Daily Business Review later this week in an article about parking. Parking is lining up to be the next hot button in my world. Thank goodness my spaces are already reserved.