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MIAMI-Two recently released third-quarter reports on the office market here share two key findings: strong real estate investment figures and a continued increase in vacancy rates. In that quarter, the vacancy rate for the county grew 1.5% to 18%, according to Cushman & Wakefield’s third-quarter Miami-Dade County Office Overview. This is not a serious hike in the eyes of some area brokers.

“I don’t think it’s significant,” Peter Harrison, senior managing director of Cushman & Wakefield in Florida tells GlobeSt.com. “Our markets are doing OK. The Brickell markets are doing OK. The downtown market is stable. But I’m certainly not going to say our markets are robust. We’re flat.” He expects things will remain that way for the next six months.

The downtown vacancy rate rose only slightly to 15.4% in the third quarter, and class A office buildings continue to be well-leased, the C&W report states. It goes on to say that year-to-date leasing activity in the area was steady, totaling 269,327 sf.

Brickell Avenue’s vacancy rate increased 1.2%, compared with last quarter, and 5.9%, compared with the same quarter a year earlier, according to the report. Factors included sublet space and Arthur Andersen’s vacating 55,000 sf at 1111 Brickell Ave.

The 480,000 sf of space to be delivered next year is “definitely going to add to the Brickell Avenue vacancy rate,” Harrison says. “I’m not sure the overall Miami-Dade vacancy will increase because some of the vacancy is going to be absorbed.”

The overall county vacancy rate crept up 90 basis points, compared to the previous quarter, to 15.6%–the eighth quarter in a row that had increased vacancy rates, according to Grubb & Ellis’ third-quarter Miami-Dade office report.

The market that is faring the worst is Miami’s biggest suburban submarket, Airport/West Dade, which has an overall vacancy rate of 21.9%, 1.1% higher than last quarter, and 2.2 million sf available, the report states. Leasing activity there is significantly lower than in previous years. Average year-to-date leasing activity over the past five years has totaled 784,729 sf. This compares to only about 520,000 sf for the same time period in each of the past two years, the report says.

Other key findings for Miami-Dade County showed: year-to-date leasing activity down 1.1 million sf, almost half of last year’s total 2.5 million sf for the comparable time frame; year-to-date net absorption was a negative 127,330 sf; sublease space, which “continues to be a problem,” according to the report, rose to 833,861 sf that quarter.

The Grubb & Ellis report showed an even higher figure for sublease space. “Another sobering milestone was achieved during (the third quarter 2002), when the amount of sublease space crossed the 1-million-sf threshold.”

Attesting to the strength of the investment market in the third quarter, investors bought real estate despite the stock market’s downturn. Five prestigious buildings totaling 3.1 million sf of space in the central business district sold recently for more than $669 million combined.

The most notable sale, according to Grubb & Ellis, was the First Union Financial Center downtown. This 1.1-million-sf building sold for a premium $235 per sf. Other notable buildings sold were the Barclays Financial Center, which went for $253 per sf, and One Brickell Square, which sold for $194 per sf.

“Miami’s strong international influence continues to attract investors and speaks to the desirability of the real estate market as a whole and the office market in particular,” the Grubb & Ellis report states.

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