The overall vacancy rate in Miami-Dade at the end of the third quarter dropped for the second consecutive quarter to 18%. However, overall average asking rental rates also dropped during the third quarter by 4% to just under $31 per square foot, an indication that most landlords have been aggressive to retain tenants and capture new tenants to stabilize their properties.

GlobeSt: So we've long hit the bottom.

Blanca: We hit bottom in 2009 and early 2010, and now we are in for a steady recovery during the next two to three years. We have seen large users of office space maintain—and in some cases, even grow—their space requirements even after having made adjustments to increase workplace densities to drive space efficiency. This marks a dramatic change from 2008 and 2009 when the trend was to contract as a result of reductions in headcount.

The office market is closely tied to employment. We will need sustained employment growth for this positive trend to continue. Florida’s 12% unemployment rate is among the five highest in the U.S. Although Florida benefitted from 30,000 new jobs this year, we need to accelerate this trend to continue to drive positive absorption of office space.

GlobeSt: Have buyers set their sights on Florida again? Do you anticipate investment sales picking up in 2011 after two years of stagnant activity?

Blanca: In Miami-Dade, the sale of Miami Tower to La Salle and New Boston Fund’s recapitalization of One Park Square at Doral, and in Broward County, the sale of the Royal Palm buildings to Duke and Las Olas Centre to USAA Realty indicate that institutional owners continue to be committed to the South Florida real estate market. Between prospective buyers looking for a value play in distressed assets and those seeking stabilized properties with strong cash flows, we can expect an uptick in capital markets activity next year.

GlobeSt: What metrics are you and your clients looking at headed into 2011 that might be further reason for optimism?

Blanca: There are certainly some reasons for optimism, particularly in South Florida. Key metrics like personal income growth, taxable sales growth, and new housing starts are all expected to rise this year after experiencing declines in 2009. These are leading indicators for net-positive job growth. Miami continues to attract international business and investment which should fuel and accelerate its economic recovery.

On the trade front, projections indicate that Florida exports to key trade partners—Europe, Japan, Brazil, Colombia, etc.—will rise across the board this year and next year, with total foreign output increasing by as much as 4.5%, according to the Washington Economics Group. This is a key indicator for many multinational companies that may be eyeing the launch of a U.S. or Latin American presence here.