The office market in Miami-Dade County has fluctuated since the beginning of 2017. Vacancy rates have increased 3 percent this quarter and are back to the levels seen in the first quarter of 2017. In comparison to the third quarter of 2016, vacancy rates have decreased 80 basis points year-over-year from 10.6 percent to 9.4 percent. Although net absorption for the quarter has decreased, absorption quarter-to-date has already surpassed the total for 2016 at almost one million square feet. This boost in absorption indicates the continuous demand by office-space users in 2017.
Both downtown and suburban Broward County boast strong market momentum in the third quarter on 2017. Vacancy rates plummeted 60 basis points quarter-over-quarter as a result of strong demand for the limited available office supply and a lack of new product delivered to the market. Across the County, gross rental rates increased 60 basis points to $27.21 per square foot quarter-over-quarter and Class A rental rates climbed 80 basis points to $31.81 per square foot. New ownership at recently traded assets have been pushing rents after
trading at a premium, as have owners of Class B and C buildings that have invested by renovating and providing capital improvements to their assets.
Investment activity in Palm Beach County remains elevated relative to neighboring Broward County. Year-to-date approximately $606 million traded in Palm Beach County, a significant 30 percent more trade activity than Broward County year-to-date ($466 million). Demand for office product stems from a mix of all types of investors and many new groups actively seeking opportunities in Palm Beach County.
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