Office Sector Picks Up in Miami

By Veronica Grecu

Office-using employment in Miami, click to enlarge

Miami’s growing economy, strong demographics and consistent job growth continue to fuel demand for office space and investor interest. Some 23,000 new jobs were added in the 12 months ending in March, a 1.9 percent increase year-over-year in the metro’s total payrolls and slightly above the 1.6 percent national growth rate. The education and health services sector increased by 3.5 percent, with about 6,300 new jobs added during the past four quarters. Employment gains were also solid in the trade, transportation and utilities sector (5,200 new jobs), while roughly 5,000 jobs were added in the leisure and hospitality sector.

A number of businesses are opening offices or expanding in Miami’s central business district, and more than 1 million square feet of space was leased in the city’s core in the 12 months ending in July. Companies looking for a tonier address opted to lease space in some of the metro’s boutique submarkets, such as Miami North, which registered the highest rent rates. The metro’s office inventory includes more than 51 million square feet of space and is largely dominated by Class A and A+ properties.

The first wave of major office developments since 2011 is currently underway, with roughly 1.5 million square feet of space under construction across the metro.

Miami has continued to attract national and overseas attention and capital, with transaction volume topping $1 billion in the 12 months ending in July. Investors have focused on the CBD, which saw $806 million of trades.

In the wake of Hurricane Irma, South Florida’s office sector was well-prepared, having invested heavily in pump systems and building standards that enable easy and efficient flood drainage. According to many office landlords, the damage to their assets was minimal.

Read the full Yardi Matrix report.