New Class A Office Rents Pushing $40 Per SF

MIAMI-The 11.38-million-sf CBD’s office market enters the third quarter in the strongest shape in several years as class A and class B rents continue to rise, vacancy levels continue to drop and investment pricing levels are among the highest in the country, reports the local research team for Jones Lang LaSalle.

“Over the next decade, the entire CBD will be dramatically changed–both physically and demographically, as significant construction and planned development is now under way within and around the Downtown area, stretching north to the Omni and south to Brickell,” says Jones Lang LaSalle senior vice president Scott Strickland. He points to the second quarter’s 8.74% vacancy in the six-million-sf Downtown submarket and the 11.5% vacancy in the 5.35-million-sf Brickell submarket, both of which reflect sublease space. Class A vacancy Downtown is 6.32%; Brickell’s class A space is 8.23% empty. Total vacancy was more than 11% a year ago.

Average class A rents Downtown are $31.46 per sf. Brickell’s average quoted rents for class A space are $36.12 per sf. The highest second-quarter quote was $41 per sf at Courvoisier Centre. “If current market conditions prevail, rent growth will continue over the next two years, with larger users being forced to accept creative solutions in their existing buildings,” Strickland predicts.