Office Vacancy Rates Declining in Broward

BROWARD COUNTY, FL-As more companies are deciding on their space needs and with limited new construction, the county office market is seeing declining vacancy rates, and the trend is expected to continue, according to a recent market report by CB Richard Ellis.The market, seeing continued signs of revitalization, also experienced strong absorption of 215,872 sf in the third quarter, along with stable average asking rents. Deanna Lobinsky, first vice president for CB Richard Ellis in Fort Lauderdale, says she expects vacancy rates to continue to decline.”I think…now with construction really on hold and the fact that companies are finally getting active and making decisions on their needs…I think we’re going to see continued declines,” Lobinsky says. The vacancy rate dropped almost a full percentage point–a big decrease–from the second to the third quarter, she points out.One office building under construction in Plantation, Cornerstone 2, which is about 112,000 sf, probably will be completed early next year, she says. “In western Broward County there are some larger requirements looking for space next year, so that’s going to absorb a lot of the vacancies in the western markets,” Lobinsky says.In the eastern markets, Cypress Creek, which historically experiences higher vacancies, jumped from 19.6% to 15.3% in one quarter. That was mainly due to Kaplan college’s 100,000-sf, $17-million lease at 1515 Cypress Creek Rd. in Fort Lauderdale’s Cypress Creek Concourse office park. However, commitments for spaces between 10,000 sf and 20,000 sf in Broward County are strong–and expected to stay that way, she says.”We’re going to see a lot of 10,000- to 20,000-sf leases with an occasional big one,” according to Lobinsky. “You do a handful of 10,000- to 20,000-sf leases, and you start to see a noticeable difference.”The highest average asking rental rate this quarter–$17.95–was reported in class A space in the Plantation submarket. The highest direct vacancy rate–26.70%–was in class B space in the central business district, the CBRE report adds.