While nationally, the vacancy rate is projected to decline from 17% at the end of 2003 to 16% a year later, the Miami-area vacancy rate is expected to remain stable at 15.2% at the end of both 2003 and 2004. The report projects declines in the Miami vacancy rate to 14.3% at the end of 2005 and 14.1% at the end of 2006.
The vacancy rate in the central business district is anticipated to go from 13.3% at the end of last year to 16.8% at the end of this year, then drop to 16.4% at the end of 2004. This is a slightly different pattern than with the suburban vacancy rate, which is forecast to increase from 14.6% at the end of 2002 to 15.2% this year then grow again to 15.5% next year.
Also according to the report, the average gross rental rate in the Miami-area office market is expected to drop by 2% this year to $22.76 per sf. This compares to about $23.20 last year. The rate should increase the next three years, to about $22.90 in 2004, $23.20 in 2005 and $23.60 in 2006.
The Miami area's average rent is expected to stay lower than the average rent nationwide at least through 2006. The report also states that, while Miami-area office market absorption has surpassed the national average the past three years, this year is expected to be different as absorption becomes slower. Miami should exceed the national average again in 2005, according to the report. The suburbs will have more absorption than the central business district the next two years.
Finally, the report states that Miami-area office market construction is expected to surpass the national average as the Brickell submarket and the suburbs deliver new buildings. However, a slow construction pace is expected to cause it to lag behind the country next year and in 2005, as it did the past three years.
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.
