South Florida Office Market Report
| Average Asking Rent (Price/SF) | $39.68 |
| Vacancy Rate (%) | 14.0% |
| Net Absorption (SF) | 268,445 |
The region saw its third consecutive quarter in demand growth with over 268,000 square feet positive net absorption at the close of the first quarter of 2022. Although this was less than the previous quarter, it was still a positive signal that South Florida continued its road to recovery after the impacts were felt from the pandemic. Over 1.7 million square feet of negative absorption occurred as a result from the global shutdown, and more than 1.2 million square feet of positive absorption occurred since the second half of 2020. Palm Beach continued to lead the region in demand growth, and Miami-Dade followed closely. Broward County had a minor setback and saw supply barely outpace demand at the start of 2022. All three class segments saw positive absorption for the quarter as the Class B segment regained the lead, with over 150,000 square feet of absorbed space, while the Class A sector dipped to the second spot, with over 111,000 square feet of positive net absorption. The lower-tier Class C office segment saw a more balanced approach between demand and supply with a modest 6,190 square feet of absorbed space. Asking rents continued their climb upward with the overall average rising by $2.21/SF from the first quarter of 2020, the strongest year-over-year increase since midyear 2007 just before the financial crisis of the Great Recession. The Class A segment experienced the strongest growth with a $1.88/SF increase from one year ago. Landlords of trophy assets continued to push asking rents up significantly from quarter to quarter, despite the Class A segment being the most impacted from the pandemic. This can be attributed to the great migration to Florida; building owners see the opportunity to push rents to unprecedented levels as population growth spurs increased office leasing from companies. Development remained disciplined as no new completions took place and no new projects broke ground, with 1.2 million square feet of new inventory remaining underway.
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South Florida Industrial Market Report
| Average Asking Rent (Price/SF) | $10.67 |
| Vacancy Rate (%) | 3.5% |
| Net Absorption (SF) | 1,135,020 |
2022 is off to a strong start for the industrial segment with over 1.8 million square feet of absorbed space recorded during the first quarter of 2022. This was down from the previous quarter but still stronger than the 1.5 million square feet of positive net absorption during the same period one year ago. Approximately 2.4 million square feet of net inventory was also delivered during the first three months of the year, the second highest on record and slightly down from the 2.8 million square feet delivered at the close of the first quarter of 2021. Despite the robust delivery, the overall vacancy rate in South Florida only increased 10 basis points from the previous quarter but was still down 150 basis points from this time last year. Miami-Dade held onto the lead for demand within the region as Broward County also saw another strong quarterly performance. Palm Beach’s industrial market saw another consistent performance of demand outpacing supply. Over 1.3 million square feet of absorbed space came from the warehouse/distribution segment, while the general industrial sector trailed to take the number-two spot with over 482,000 square feet of positive net absorption. The R&D/flex sector saw a more balanced approach with a modest 12,130 square feet of absorption, a significant slowdown from one year ago. Developers have yet to slow down on breaking ground of new projects, with 39 buildings totaling approximately 8.0 million square feet of new inventory. This is the highest amount of new industrial product underway in recorded history. Healthy pre-leasing of buildings under construction, coupled with tight market conditions, pushed the overall quoted average asking rate closer to the $11.00/SF mark. The $1.64/SF increase from one year ago marked a 18.2% rise in the overall average, which was the largest annual increase ever as landlords accelerated asking rents upward and will likely continue to do so throughout 2022.
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