Marcus & Millichap

South Florida Local Office Report

Second Quarter 2019

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Vacancies and Rents Improve Even as Development Expands in Some Southeast Florida Markets

After moderated period, construction ramps up in West Palm Beach and Fort Lauderdale while fundamentals carry momentum. A subdued development pipeline and consistent demand for space has substantially improved office operations in West Palm Beach over the past several years. The market’s vacancy rate has dropped from a cycle high of 20.7 percent in 2010 to under 14.0 percent this year, the most substantive recovery in the region. Availability will decline sharply again in 2019 despite a year-over-year rise in deliveries, as the metro’s largest completions are already fully leased. A similar expansion to the construction pipeline in Fort Lauderdale will hold vacancy flat this year but not impede rent growth. Monthly rates are appreciating at a rapid clip here as biotech and business development companies like Ultimate Software absorb more space.

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