In South Florida, which consists of Miami-Dade, Broward and Palm Beach counties, the availability rate was 10.3%, a 0.2% decrease from last quarter and a 3.4% decrease from last year. Rents averaged $27.29 per sf, up 7.6% for the quarter and 7.4% for the year.
In Palm Beach County, rents jumped from an average of $24.64 per sf a year ago to $30.54 per sf in Q3. In Miami-Dade County, rents increased from an average of $25.91 per sf a year ago to $26.46 per sf in Q3. In Broward County, rents decreased slightly from $25.43 per sf on average to $25 per sf during the quarter, according to the report.
Several factors are having an impact in the office market. New office supply is lagging behind vigorous demand, spurring increased rental rates. According to the Department of Labor, employment growth in the region has totaled 15.8% over the past five years, the report states.
In addition, landlords have passed on some increased expenses to tenants. For example, insurance premiums in some cases have increased by 300%. Florida Power & Light's surcharges to recoup hurricane repair costs are estimated to range from 21% to 29% for small- to mid-sized businesses and 26% to 37% for large commercial users, the report says.
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