Miami Q3 Vacancy Rate at 23%: Codina Realty Report

MIAMI-A newly released third quarter Miami-Dade County office market report paints an even grimmer picture of area vacancies than previous reports. Conducted by Codina Realty Services Inc. ONCOR International, the report states that the overall vacancy rate for the county was 23%, “and is not expected to correct itself this year.”

The main causes: more than one million sf of new space delivered and more than 400,000 sf returned to the market. These things “further added pressure to an already saturated marketplace,” it says. And the county has another 985,512 sf of office space under construction.

These factors also contributed to a negative year-to-date absorption rate of 913,906 sf. The report calls this a “sharp drop” from the positive 623,398 sf recorded last year and the 308,645 sf just last quarter.In fact, in the second quarter, the vacancy rate for the county grew 1.5% to 18%, according to a similar study by Cushman & Wakefield. This, however, is not a major concern to some area brokers.

As the Codina Realty report, and other recent reports, states leasing and sales activity proved strong in the third quarter, despite the current economic slowdown. More than 2.9 million sf of space has been sold during the first three quarters–more than one million sf of that in the third quarter alone.

The Cushman & Wakefield report showed that year-to-date leasing activity was down 1.1 million sf from last year’s 2.5 million sf for the same time frame.

In addition, the Codina Realty report showed the average rental rate remained fairly stable, at $23.49 per sf in third quarter, compared with $23.63 per sf second quarter. The average class A rental rate was $28.39 per sf third quarter.

Three recent reports show a range of sublease space, but all show concern. “Sublease space continues to outpace demand,” totaling 445,000 sf in Q3, up 125,393 sf from the second quarter, the Codina Realty report states. C&W reports sublease space rising to 833,861 sf in Q3; and a similar report by Grubb & Ellis showed more than one million sf of sublease space on the market, calling that “another sobering milestone.”

“Sept. 11′s brunt is still being felt; however, its economic remnants are expected to lessen in time, thus swinging the economic pendulum in a more positive direction,” the Codina Realty report adds.