Broward County Office Market Holding Steady

BROWARD COUNTY, FL-The Broward County office market has experienced a decline in overall vacancy rate for the fifth consecutive quarter, according to a new report by Grubb & Ellis, which states that the market is “producing consistent results.”Also in the county, sublet space fell 37% to 521,038 sf in the past six months, due to tenant demand and lease expirations, the Office Market Trends report states. The total vacancy rate in the county declined 80 basis points to 15.6%, while the total absorption for the first quarter was 189,061 sf.In the central business district, vacancy is on a steady decline, dropping 1.1% in the first quarter, while first-quarter absorption was an encouraging 81,501 sf. But the vacancy rate was still higher in the central business district–17%–than suburban areas, where the rate was 15.4%, according to the report. The Hollywood submarket also had a dramatic 5.2% drop in vacancy rate.On the other hand, the Cypress Creek submarket experienced a high vacancy rate of 22.5% first quarter. The Northwest Broward/Coral Springs submarket, which has nearly 1.9 million total sf, and Southwest Broward submarket, with 2.5 million sf, saw much lower rates, at 7.1% and 7.3% respectively.Two submarkets–Commercial Boulevard and Plantation–had no change in their vacancy rate. Overall, the county’s vacancy rate is expected to drop another two percentage points by the end of the year, the report adds.Eight of 10 suburban submarkets showed space gains in the first quarter. The Cypress Creek and Sawgrass Park submarkets had a total of 136,463 sf of positive absorption. Meanwhile, results were not as positive in the Pompano Beach submarket, which had a negative 68,441 sf net absorption for the first quarter, or Hallandale, which posted a negative 24,149-sf net absorption for the period, according to Grubb & Ellis.In addition, countywide, construction deliveries are steady, with Southwest Broward having 120,000 sf under construction, the highest of the county. The report also that the tenant leverage in the county is coming to an end, and effective rents should start coming close to asking rents. Rent gains are even expected in many cases.