The largest vacancy increases have been in the Airport West submarket and in Miami Beach, where last year's dotcom craze resulted in a construction boom and the largest office inventory in Miami-Dade county.
But the Brickell and Downtown submarkets, where class A lease rates are running as high as $38 per sf, have maintained high levels of occupancy. Overall gross lease rates are averaging $21.72 per sf.
According to CB Richard Ellis first vice president Mike Klotz, the third quarter statistics mirror those of the second quarter and are a continuation of a softening trend that began in March, rather than a result of the terrorist attacks of Sept. 11. "I haven't had anyone tell me that Sept. 11 has affected their plans," Klotz tells GlobeSt.com.
The report bears out Klotz's statement: overall vacancy rates fell from 10.4% to 9.1% in the first quarter, then increased to 9.9% in the second quarter.
While the report notes that lease rates have remained stable in most markets, Klotz said he expects the rates to soften somewhat overall, with the exception of the Brickell and Downtown submarkets.
"Nothing indicates that we have hit bottom," says Klotz. "Many subleases have not been renewed. Many plans for expansion have been put on hold. People are looking at the revenue side of business." However, Klotz says, it is definitely "not a crisis situation."
According to the report, 15 buildings are currently under construction totaling more than two million sf of Class A office space. Much of the construction is taking place in the Coral Gables and Brickell submarkets. The report notes some concern that Coral Gables could become overbuilt due to several new projects that will be opening shortly.
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