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MIAMI-The Miami-Dade office vacancy rate stood at just over 13.6% at the end of the second quarter this year, which is a drop of seven percentage points since first-quarter 2004 and a three-year low, according to data from the local office of CB Richard Ellis. The Downtown Miami submarket is among the most active, a trend that is expected to continue, based on the anticipation of new residential condos and expanding retail under way Downtown.

The report also suggests there is a move to higher quality space, especially from class B to class A product. Class B was the only segment to experience a drop in asking rental rates in the most recent quarter. The average asking rate for class B office space at the end of second quarter was $22.58 per sf, a drop of 4.6% compared with the previous quarter, according to CBRE.

At the same time, the average asking rental rate for class A office space rose 3% in second quarter, up from $26.90 per sf to $27.70 per sf. “One theory,” suggests a CBRE analyst, is that “the City of Miami is less affected by cyclical real estate cycles than other US markets as area tenants are looking to pay more for quality office space and are not averse to risk with respect to what the economic future holds in Miami-Dade.”

Interest in office condominiums is rising, “particularly among tenants looking for less than 5,000 sf,” according to the report. Attractive lending options and low interest rates are seen as contributors to this trend.

The lowest office vacancy rate among Miami-Dade submarkets is just under 4.8% in the Kendall submarket. The highest, 31.1%, is in South Dade. Miami Beach commands the highest average asking rental rate, $30.26 per sf. That compares with $17.84 per sf in North Miami, which has the lowest average rate among the MSA’s 12 submarkets, according to CBRE.

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