4. REAL ESTATE OVERVIEW // OFFICE
// OFFICE MARKET OVERVIEW
• Overall, the South Florida office markets are experiencing
positive momentum in terms of rent growth and
occupancy gains.
• The Miami market experienced its highest absorption gains
in nine years and saw full service asking rents close at their
highest level since before the recession.
• Both the CBD and Suburban markets experienced robust
leasing activity and occupancy gains. This has helped drive
vacancy across the major Class A Suburban markets into the
single digits and far from peak levels in Downtown. As a result,
market conditions have shifted, leading to limited concessions
and abatements and increased rates, which is expected
to continue through 2015.
• The Fort Lauderdale market is seeing similar strengthening,
particularly Downtown and across the western
Suburban markets.
• Investment activity has been heavy in Broward, reaching record
levels last year in the CBD, as five Class A properties traded
in 2014 for a total of $522 million.
• As the Suburban markets improve to the south, Broward’s
western submarkets, such as Southwest Broward, have seen
activity increase among tenants currently located in Miami-Dade
County. Significant new construction is underway in the area for
the first time since 2009.
• The Palm Beach County office market also saw an increase
in investment activity, particularly in Boca Raton, which
experienced a seven-year high in volume. This has resulted
in rental increases in the Suburban markets after two years of
stagnation.
• Quality space is dwindling among the trophy assets Downtown,
leaving limited options for interested tenants. The relocation
of firms from out of state, which has been occurring more
frequently in recent years, may be hampered by the limitation of
available trophy space; however, ma ɭ