MIAMI—Promising. That's the word Marcus & Millichap is using to describe Miami's office outlook in its third quarter market report. Pointing to steady job growth that's generating new office space demand while new office development slows, the firm expects positive net absorption to reduce office vacancy rates and drive up rents.

That said, Miami's office market is still not back on par with its pre-recession low in vacancy or peak rents. According to M&M, developers will bring online 260,000 square feet of office space in 2014. That total includes 30,000 square feet in two medical office properties. By way of comparison, only 172,000 square feet was delivered in 2013.

Against that backdrop, the firm predicts vacancy rates will drop 190 basis points to 14.8% in 2014. That would better the 80 basis point drop in Miami's office market in 2013. Meanwhile, average rent in Miami-Dade County will grow 2.8% to $29.24 per square foot in 2014, M&M figures, after a 2.1% gain last year.

“Expansion in predominantly office-using employment sectors is likewise strong, led by professional and business services, and financial services,” M&M reports. “The booming housing market, growing need for healthcare, and foreign in-migration and investment will create office-using jobs in areas such as residential mortgage brokerage, port commerce and international banking.”

As M&M sees it, projected expansions in medical practices should produce demand for class B and C medical office space. Overall, the firm reports close to 2 million square feet of additional space will be occupied this year.

Then there's the growing perception of Miami as an international gateway market playing to the county's favor on the office market front. Institutional investors are showing strong interest, especially those looking for opportunities outside traditional core markets.

“Investor interest will intensify as the demand momentum and declining vacancy combine to push rents higher,” M&M predicts. “Through the second quarter, rents have risen year over year and are forecast to rise for the full year, although they will remain below the 2008 peak.”

According to M&M, sublease space has declined to a minimal level and rents should continue to climb moderately even as landlords regain control of the market. “Led by trades of Class A properties, office sales are rising at a moderate rate after a big increase following the end of the recession,” the firm predicts. “Prices are also rising moderately overall, led by a big jump for Class c buildings, while cap rates remain stable in the upper-6% range overall.”