Larry Richey Larry Richey

ORLANDO—The latest jobs report shows that Florida added 244,500 new jobs over the past year, a 3% increase. Office-using employment increased by more than 60,000 jobs, driving demand for office space.

That’s according to Cushman & Wakefield’s Mid-Year 2016 Florida Statewide Rental Report (FLRR). This report reveals current office asking rates in major markets across the state and compares them to rates documented at the height of the last real estate cycle in 2008 and 2009.

“Cushman & Wakefield continues to be bullish on the office market statewide,” Larry Richey, managing principal and Florida market leader at CushWake, tells GlobeSt.com. “In the short term, rents jumped significantly on ever-tightening availability options.”

Statewide, full-service asking rental rates for class A office space increased 6.6% over the past year to $32.27 with four of six markets posting rental gains of more than $2 per square foot over the past four quarters. Meanwhile, full-service asking rents for class A office space have surpassed rent peaks from the last cycle.

“We are acutely challenged in several markets in providing space options for larger tenants, especially in class A space in the CBDs,” Richey says. “The shift in demographics to more urban, live-work-play environments and tenant demand should build confidence with developers and lenders for new construction.”

Since the end of 2009, new and existing tenants have absorbed 11.3 million square feet of Florida’s class A office space. That represents a 6.8 percentage point drop in the direct vacancy rate through the first half of 2016. Florida research manager Chris Owen believes the market will remain positive in 2016.

“Supply side constraints in most markets are pushing office market fundamentals close to the record highs from the previous decade,” Owen tells GlobeSt.com. “Besides Miami and some smaller projects across the state, the bulk of new major office construction has been build-to-suits. The steady lease up of new construction in Miami indicates, that with the right project, space will be leased.”

Are you keeping your eye on the next cycle? This commercial real estate leader is. Find out what he’s doing about it in this exclusive interview.

Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What’s driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.