Leasing activity for 2002 was 7.2 million sf--falling 18%, compared with 2001. The overall vacancy rate rose slightly to 9.4%, an increase of 0.6%. The county's overall net absorption was positive but weak, ending the year at 107,736 sf.
The not-so-positive year-end results are attributed to the economy. Despite this, however, one hint of a market improvement is the 10% decline in sublease space over the past year. At year-end, sublease space was at 1.4 million sf.
Another positive note is investment sales stayed strong, according to the report. Institutional and individual investors continued to purchase real estate despite the unstable stock market.
"We're seeing a lot of investment money coming out of the Latin American markets," George Pino of Codina Realty Services tells GlobeSt.com. A and B product is being absorbed by Latin American investors that otherwise would not be there, he says.
The Airport West submarket, "Miami's most sought-after sector," saw an even larger drop in leasing activity than the county overall compared with a year earlier--recording a decline of 25% to 3.1 million sf.
The vacancy rate increased a little bit, 0.4% to 12.6%, in the Airport West submarket, which also reported a positive net absorption of 616,938 sf. These two figures are largely attributed to the 72% preleasing of the 226,168 sf of industrial space delivered to this market this year.
As plenty of space remains in the Airport West market, property owners continue to discount their asking rental rates. The average rate dropped from $7.41 per sf gross at the end of 2001 to $7.33 per sf gross a year later. Furthermore, property owners are offering lower rent escalations and rent abatement, particularly to national tenants, the report states.
Additionally, the second-largest sector, the Airport North/Medley submarket, ended the year with the second-highest vacancy rate, 11.3%, a 1.8% increase, compared with a year earlier.
On the other hand, the county's smaller submarkets have looked fairly healthy. For example, the overall vacancy rate in the Northeast Dade submarket dropped 1.7% to 0.7% in the past year. Also, the North Central Dade submarket saw a 15% increase in leasing activity from a year ago to one million sf at the end of 2002.
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