Marcus & Millichap

South Florida Office Market Report

Second Quarter 2018 Outlook

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Investors Increase Activity Beyond the Core to Capture Remaining Upside

Strong in-migration and steady job growth seen as more businesses grow their South Florida footprint. Expansion by financial services and healthcare companies, along with major corporations with a Latin American focus, have contributed to vacancy being near the low for the cycle and substantive rent gains. Efforts have also been underway to diversify the economy and attract more tech and finance talent, placing South Florida’s office sector at an inflection point. Recent corporate tax cuts and the already tax-friendly environment of Florida will likely lead companies to expand more aggressively, which will fuel demand for office space.

Robust year for office deliveries, particularly in the suburbs. Deliveries are forecast to climb to their highest point of the current cycle, with more than 2.8 million square feet set to open across South Florida this year. More than 60 buildings are underway in the three-county region, many with a mixed-use component or near restaurants, shops and entertainment. There has also been a greater development push toward the suburbs as for years construction has been low in these areas and land costs are more affordable than in the urban core. The largest project set to open this year will be in Downtown Miami: a 194,000-square-foot tower that is a part of Miami’s new Brightline station, which blends rail, residential, office and retail components.

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