MIAMI-If 2008 was bad, 2009 was worse for Florida’s commercial real estate market. But Florida started to regain its stability in 2010 as leasing activity picked up, investors started making moves, and rental rates and property values began stabilizing. So says a Florida Market Perspectives assessment from CB Richard Ellis.
“2010 will be remembered as the year that Florida began a slow and steady climb out of the recession,” says Mary Jo Eaton, senior managing director for CBRE in Florida. “Market dynamics have started to improve and we’re seeing increased activity and interest throughout the state.”
According to CBRE, Miami-Dade, Broward, Palm Beach and Southwest Florida counties all saw positive net absorption in the retail, office and industrial sectors by year-end. The Orlando, Jacksonville, and Tampa Bay markets all saw improvements in these sectors, either reporting positive or flat rates of net absorption or experiencing sharp declines in rates of negative absorption.
Overall vacancy rates for office, retail and industrial throughout the state fell to 11.6% in 2010, the first annual decrease since 2006 when vacancy stood at 5.2% and began its incline of over 30% annually through 2009.
Miami-Dade County was the largest contributor to the upward movement, posting almost 5 million square feet of absorption. However, Miami-Dade also has the greatest amount of product under construction with almost one million square feet.
Across Florida, a ‘silver lining’ is evident as the analysis of 2010 figures reveals 2011 trends. Rates are showing signs of stabilization in Broward County with the spread between asking lease rate and actual lease rate narrowing. In Palm Beach County, the biotechnology industry continues to grow with several expansions and relocations to this area.
Flight to quality by tenants seeking high quality space at lower rents continues in the Southwest Florida markets as landlords offer concessions and other means to remain competitive in order to retain tenants. In the Tampa Bay area, 2010 saw several buildings trade providing a foundation from which to underwrite deals in 2011.
The Orlando market is seeing companies with larger space requirements continue to surface as leasing and sales activity continue to accelerate. Jacksonville is looking to the Port of Jacksonville to bring some overdue economic relief.
“As we head into 2011, leasing and sales are on the rise, capital is more available and economic indicators are heading in the right direction,” Eaton says. “We are guardedly optimistic that Florida is poised to see additional forward momentum this year and beyond.”
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.
