Vacancy rate in Miami remains low

Vacancy rate in Miami remains low

Even though the past few years have been quite turbulent in the USA with the pandemic, the record-setting inflation, and political turmoil, the vacancy rate of offices in Miami remains almost unchanged. According to the Colliers Q2 2022 report, the inflow of a huge number of new tenants was balanced out by commissioning new premises.

Over that period, the vacancy rate in the Miami-Dade County was 11% (across 1,693 buildings totaling 94.3 million square feet).

Andrew Hellinger, co-principal of Urban-X Group, benefited from the influx of national and local companies willing to open an office in Miami. For instance, his investment in River Landing, a mixed-use project on the Miami River, paid off. “The vacancy rate in the Health District where River Landing is located has historically been zero. When we commissioned these offices in a tight market, tenants turned up even faster than we had expected,” Hellinger reports.

The vacancy rate in the Miami-Dade County remains almost unchanged despite the concern that workers’ return to offices could be delayed by the new wave of COVID-19. “Many new companies emerge in South Florida, complementing the organic growth of already existing firms willing to expand their footprint and upgrade the buildings and spaces where they do business,” Jonathan Kingsley, executive managing director at Colliers, pointed out. “This balanced out the lower demand for offices from companies that are embracing remote and/or hybrid work models, fully or partially.”

Developers were more active over the past three months than in 2019: there is currently 3.2 million square feet of office premises under construction (compared to 2.8 million in the second quarter of 2019).

However, the recent developments in the economy are beginning to affect the market, particularly in the investment property sector. “Over the past few weeks, capital markets / investment sales transactions for office buildings have been slowing down. Many buyers have to reduce their offers due to higher interest rates and cost of equity and debt,” Kingsley emphasized. “Similarly, many owners who were going to sell office assets put it on hold until debt markets stabilize and buyers resume aggressive competition.”

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