Overall and direct vacancy rates in two of three South Florida counties increased over the three months ended March 31, according to a new market survey published by Cushman & Wakefield of Florida Inc, though asking rates remain stable in each of those markets.
Market researchers recorded a 1.5% increase in overall office vacancies over the three-month period in Miami-Dade County and a 1.3% jump in direct vacancies. Vacancies increased slightly in Broward County--up fourth-tenths of a percent for overall and direct vacancies. Palm Beach County vacancy rates, meanwhile, dropped 1.5% in both overall and direct vacancies.
Talk of lease concessions are emerging more and more in negotiations with property owners, Mitchell Millowitz, a senior director in the Fort Lauderdale office of Cushman & Wakefield, tells GlobeSt.com.
"Landlords are being much more flexible," Millowitz says. "In general, there is a feeling we're at equilibrium, with many landlords reporting a slowdown and forecasting a slowdown."
In response, Millowitz adds, owners of commercial office space are responding with a more proactive marketing effort. "They're being much more aggressive in recruiting tenants--particularly quality, credit-worthy tenants," he says.
Amid this softness, brokers such as Millowitz are seeing a distinct shift in the type of leases being negotiated. "Last year, I sat at my desk and picked up a new lease almost every day," he says. "This year I sit at my desk and pick up a new sublease. It's completely 180 degrees. The Year 2000 was the year of space acquisition. Year 2001 is the year of disposition of space."
Results of the first-quarter Cushman & Wakefield survey revealed the following:
Broward County: Vacancy rate--12.5%, overall; 11.4% direct. Inventory--23.6 million sfYear-to-date leasing--1.3 million sf. Under construction--2.43 million sf. Net absorption--177,206 sf. Class A asking rent--$24.79 per sf.
Miami-Dade: Vacancy rate--12.1%, overall; 11.4% direct. Inventory--38 million sf.Year-to-date leasing--888,974 sf. Under construction--2.3 million sf. Net absorption--34,843 sf. Class A asking rent--$28.46 per sf.
Palm Beach: Vacancy rate--11.5%, overall; 10.8%, direct. Inventory--18 million sf.Year-to-date leasing--802,642 sf. Under construction--806,069 sf. Net absorption--40,690 sf. Class A asking rent--$28.48 per sf.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
