Florida’s largest office
buildings, such as Miami’s
Bank of America Tower
at International Place, are
maintaining occupancy through
short-term lease renewals.
square feet of office and mixed-use space
is set for delivery during the second
quarter, which “does not bode well for the
remainder of the year where absorption is
concerned,” says Shelli Browning, research
director with GVA Advantis in Orlando.
Smaller amounts of new space are
being built in the Tampa Bay, Broward
County and Palm Beach County markets,
though brokers say preleasing of those
buildings is lacking. A minimal amount of
new space is under way in the Jacksonville
market, where vacancy is already above
20% through the first quarter.
Movement of tenants from older class
B stock to newer upgrade space is already
happening, especially where they can
take advantage of cheaper class A rents.
FLORIDA OFFICE MARKETS
MARKET
Miami
Tampa
Orlando
Broward County
Palm Beach County
Jacksonville
Pinellas County
STATE TOTAL
INVENTORY
46.5 million sf
31.1 million sf
37.3 million sf
29.8 million sf
25.7 million sf
25.1 million sf
12. 9 million sf
208.4 million sf
VACANCY
15.2%
17.9%
17.5%
16.1%
22.1%
21.3%
19.7%
18%
AVG RENT
$30.72
$23.34
$22.41
$27.97
$29.68
$18.78
$20.96
$25.30
CONSTRUCTION
3 million sf
349,000 sf
823,000 sf
204,000 sf
168,000 sf
33,200 sf
132,000 sf
4. 8 million sf
SOURCE: Cushman & Wakefield of Florida
Only the Miami market has asking rents
higher than $30 per square foot, with
all other markets on either side of the
state average of approximately $25 per
square foot, according to Cushman &
Wakefield.
In the meantime, lease renewals are
playing a big part in sustaining office
markets and individual buildings,
though brokers say tenants are seeking
shorter terms than in prior years when
business was better. Generous tenant
improvement allowances, many months
of free rent and other concessions are
driving the sector now.
“It’s not great for owners and
developers, but it is for tenants and users,”
Richey says, adding that landlords must
take the same approach as economic
development groups in gaining and
keeping occupants. “When you’re in an
economy like this, it’s all about what you
can offer companies and their employees.
We’re right there.”—REFLA
