South Florida’s commercial real estate market is poised for a solid 2016. At the end of 2015, the unemployment rate in Miami-Dade was at 5.6%, down 90 basis points over last year. Jobs were created in most industry sectors across the board. Broward County’s unemployment rate was 4.7%, down .8% from the previous year. Miami’s proximity to Latin American markets helping to draw in tech firms.
Miami now ranks as the 15th youngest city of the top 50 cities in the United States, in terms of age. This trend is mainly driven by millennials. Shifting demographics, record setting tourism and Miami’s growing stature as a center of Latin-American finance, are all factors that define both the city and its commercial real estate landscape. In addition to tourism, the emergence of the millennial shopper and the rise of the Hispanic buying power, significantly impact the retail marketplace today.
South Florida Office Market
As vacancy continues to decline, net absorption rates are trending healthiest than in the last 15 years, at a record 1,200,000 square feet (triple the absorption just two years ago).
Miami’s Tech Office market could be poised to compete within the major US tech sector, as the companies within the industry look to position themselves to tap into the Latin American talent and markets.
The office market in Broward ended the year with the lowest vacancy rate since 2009. Asking rents are up slightly, while net absorption is significantly better than in 2015.
South Florida Industrial
The overall vacancy rate continues to drop while asking rents increase, closing last year at the highest levels since 2008. Close to 1.2msf of industrial space was delivered in 2015, with another 1.4msf under construction. Pent up demand for quality, efficient facilities drives absorption of new construction and is expected to continue in the near future.
The industrial market in Miami-Dade is expected to show solid growth in 2016, supported by jobs increase and economic expansion, in both major and minor submarkets.
Significant growth seen with several new warehouse developments delivered in 2015. Vacancy decreased, while asking rents increased. The Broward industrial market remains active with year to date leasing reaching 4,200,000 square feet. Broward County will likely remain a top industrial market for South Florida as activity and demand move north creating new development opportunities.
South Florida Retail
Miami tops the list as nation’s fastest growing single market in upscale luxury retail over the past year. Intense development in the city’s urban core fuels Miami’s growth, where $24 Billion is spent each year by visitors. Tight vacancy, aggressive rental rate growth, robust residential development and increasing demand have resulted in the retail construction boom that is currently underway.
Retail activity remains consistent in Broward County. The highest asking rents are within the Sawgrass Park area and Downtown Ft. Lauderdale.
South Florida Multifamily
Between 2006 and 2015, developers added more than 37,000 new multifamily housing units in Miami-Dade. There are an additional 24,000 units under construction and 30,000 units in the proposal stages today. Millennials and empty nesters are seeking the urban lifestyle in a 24/7 live/work/play environment.
Recent statistics reflect 72% of Miami’s mainland core population being renters. Miami-Dade is currently one of the tightest urban rental markets in the nation. Researcher indicates this trend is not likely to end anytime soon. A slight uptick in vacancies is expected as new product is absorbed, however, asking rents will continue to increase steadily.