Miami-Dade County Office Market Report

Second Quarter 2018

Office-Using Employers Fuel Development Activity

Foreign business continues to establish Miami-Dade County as a diverse and global market that has attracted
many office-using employers throughout the county. During the first half of 2018, Miami experienced a
75-bps decline in the overall vacancy rate and there has been over half a million square feet of total net
absorption recorded since year-end 2017. The declining availability of quality space has stimulated
new development, and as of this report there is more than one million square feet of office space under
construction throughout the county. While a majority of this new inventory will deliver by the first quarter of
Miami's Wynwood
2019, there are several projects that have yet to break ground, many of which are located in Miami’s growing neighborhood is
Wynwood neighborhood located just north of Downtown Miami and east of I-95. emerging as a hotbed
Landlords have responded to this growing demand for office space by raising rental rates by an average of for development due
2.6% by mid-year 2018. These rates are substantiated by recent leasing activity which continues to take place to its unique character
in highly amenitized buildings that are in close proximity to housing, retail, entertainment, restaurants, and and 'sense of place'
public transportation. Overall, the market is in good health and is likely to experience future growth as new
product is delivered to market.

Office Market Snapshot

„„ The largest office sale of the second quarter was Cousins Properties city in the United States in which to start a business, as evidenced
and KKR's acquisition of Sabadell Financial Center in Miami-Dade by the strong and growing demand for coworking space. A
County's Brickell submarket. The 522,892-sf property sold for $250 recent study by Yardi Matrix, Inc. concluded that Miami is one of
million, or $478 per sf. The investment firms plan to spend $10 the top markets for coworking space in the country with 59 firms
million on renovations at the property, adding new amenities accounting for nearly 3% of all commercial office space.
including a gym and conference center.
„„ Miami-Dade County's economy continues to strengthen amid
„„ The largest office lease of the second quarter was Viacom's healthy population growth and declining unemployment. As of
commitment to 24,000 sf of space at Three MiamiCentral in May 2018, the county's unemployment rate stood at 4.0%, 70 bps
the Downtown Miami submarket. This lease will bring the total below the rate recorded at year-end 2017.
occupancy of the property to 95%.
„„ Miami's Underline project will transform 10 miles of concrete
„„ One of the most significant office projects currently under paving beneath the elevated Metromover path into a walking
development is The Plaza Coral Gables located in the Coral Gables and biking trail spanning from Downtown Miami to Dadeland.
submarket. This mixed-use project will bring over 500,000 sf of This beautification project has led to a myriad of office, retail,
class A office space to market when it is completed in 2020. multifamily, and mixed-use development projects along the
South Miami corridor.
„„ According to WalletHub, Miami is currently ranked the 14th best

56.3 MSF 532,693 SF 9.35% $45.32/SF/FS

Total office inventory in the Direct Y-T-D net absorption Overall Vacancy Average rental rate for class A space
Miami-Dade County market as of 2Q-2018

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 Miami-Dade County Office Market Report
Second Quarter
Orlando 2018
Office Market Report Year-End 2017

Vacancy Rate YTD Net Absorption (SF) Average Asking Rent Rate ($/SF/FS)

20% 400,000 $50.00

300,000 $45.00
15%
200,000 $40.00

10% 100,000 $35.00

0 $30.00
5%
(100,000) $25.00
0% (200,000)
$20.00
2014 2015 2016 2017 2Q18 Class A Class B 2014 2015 2016 2017 2Q18

Direct Sublet CBD Non-CBD Total Class A Class B Total

MIAMI-DADE COUNTY OFFICE MARKET AT A GLANCE

4.7% 4.0% %
YEAR-OVER-YEAR
MAY-2017 MAY-2018 INCREASE IN FULL-
SERVICE RENTAL
CHANGE IN MIAMI-DADE COUNTY RATES AS OF 2Q-2018
UNEMPLOYMENT RATE 2Q-2018 TOTAL OFFICE INVESTMENT
SALES VOLUME

MIAMI IS RANKED THE #1

INCREASE IN TOTAL NON-FARM CITY IN THE UNITED STATES
EMPLOYMENT SINCE 2Q-2017 FOR CO-WORKING
SQUARE FEET CURRENTLY UNDER
CONSTRUCTION

ADAPTIVE REUSE OFFICE

PERCENT OF CONTRACTORS RENOVATIONS ARE OCCURING TRANSIT ORIENTED DEVELOPMENT
EXPECTING TO HIRE IN RESPONSE IN EMERGING AREAS SUCH INCREASES AS MIAMI CONTINUES TO
TO NEW WAVE OF DEVELOPMENT AS WYNWOOD BUILD ALONG MAJOR TRANSPORTATION
PROJECTS CORRIDORS

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 Miami-Dade County Office Market Report
Second Quarter
Orlando 2018
Office Market Report Year-End 2017

Airport / Doral
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 5,318,657 310,052 33,090 $34.97 94.17% 5.83% 0.62% 6.45% 150,000 48,543
Class B 8,018,953 532,277 10,275 $31.39 93.36% 6.64% 0.13% 6.77% 0 113,886
Total 13,337,610 842,329 43,365 $32.71 93.68% 6.32% 0.33% 6.64% 150,000 162,429

Aventura
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 872,097 79,977 2,000 $48.23 90.83% 9.17% 0.23% 9.40% 102,000 31,452
Class B 420,747 54,788 0 $45.14 86.98% 13.02% 0.00% 13.02% 0 (12,556)
Total 1,292,844 134,765 2,000 $46.98 89.58% 10.42% 0.15% 10.58% 102,000 18,896

Biscayne Corridor
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 959,588 172,268 0 $38.89 82.05% 17.95% 0.00% 17.95% 0 30,246
Class B 988,720 60,122 6,200 $39.65 93.92% 6.08% 0.63% 6.71% 165,705 692
Total 1,948,308 232,390 6,200 $39.08 88.07% 11.93% 0.32% 12.25% 165,705 30,938

Brickell
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 4,876,518 318,508 44,699 $53.27 93.47% 6.53% 0.92% 7.45% 0 8,265
Class B 3,150,734 333,770 25,371 $36.10 89.41% 10.59% 0.81% 11.40% 0 (1,950)
Total 8,027,252 652,278 70,070 $44.48 91.87% 8.13% 0.87% 9.00% 0 6,315

Coconut Grove
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 458,177 11,075 0 $40.00 97.58% 2.42% 0.00% 2.42% 119,300 (10,586)
Class B 636,205 50,078 0 $38.62 92.13% 7.87% 0.00% 7.87% 0 (8,484)
Total 1,094,382 61,153 0 $38.87 94.41% 5.59% 0.00% 5.59% 119,300 (19,070)

Coral Gables
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 3,862,424 265,429 34,008 $41.26 93.13% 6.87% 0.88% 7.75% 290,000 101,451
Class B 2,036,593 129,521 5,637 $38.14 93.64% 6.36% 0.28% 6.64% 0 77,437
Total 5,899,017 394,950 39,645 $40.24 93.30% 6.70% 0.67% 7.37% 290,000 178,888

Downtown Miami
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 5,014,807 912,774 13,920 $50.17 81.80% 18.20% 0.28% 18.48% 194,352 (88,166)
Class B 3,464,640 494,472 4,545 $30.36 85.73% 14.27% 0.13% 14.40% 0 66,252
Total 8,479,447 1,407,246 18,465 $43.21 83.40% 16.60% 0.22% 16.81% 194,352 (21,914)

Kendall
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 1,335,652 148,662 1,221 $40.56 88.87% 11.13% 0.09% 11.22% 0 6,483
Class B 3,083,392 160,401 0 $29.91 94.80% 5.20% 0.00% 5.20% 0 (50,095)
Total 4,419,044 309,063 1,221 $35.03 93.01% 6.99% 0.03% 7.02% 0 (43,612)

South Gables / South Miami
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 1,108,504 33,883 21,774 $51.48 96.94% 3.06% 1.96% 5.02% 0 119,324
Class B 1,836,409 87,239 0 $22.42 95.25% 4.75% 0.00% 4.75% 0 11,779
Total 2,944,913 121,122 21,774 $30.55 95.89% 4.11% 0.74% 4.85% 0 131,103

Medley / Hialeah
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 625,360 2,176 33,263 $28.50 99.65% 0.35% 5.32% 5.67% 0 1,801
Class B 948,724 3,991 0 $21.11 99.58% 0.42% 0.00% 0.42% 0 9,204
Total 1,574,084 6,167 33,263 $23.72 99.61% 0.39% 2.11% 2.50% 0 11,005

Miami Beach
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 843,228 16,658 11,834 $47.26 98.02% 1.98% 1.40% 3.38% 0 12,128
Class B 1,958,503 121,090 108 $47.90 93.82% 6.18% 0.01% 6.19% 0 1,843
Total 2,801,731 137,748 11,942 $47.82 95.08% 4.92% 0.43% 5.34% 0 13,971

Miami Lakes
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 417,048 74,244 4,703 $29.50 82.20% 17.80% 1.13% 18.93% 0 4,781
Class B 1,789,402 291,443 0 $25.21 83.71% 16.29% 0.00% 16.29% 0 63,206
Total 2,206,450 365,687 4,703 $26.08 83.43% 16.57% 0.21% 16.79% 0 67,987

Northeast Dade
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 165,000 0 0 $0.00 100.00% 0.00% 0.00% 0.00% 0 0
Class B 1,606,556 236,718 14,995 $24.80 85.27% 14.73% 0.93% 15.67% 0 (23,457)
Total 1,771,556 236,718 14,995 $24.80 86.64% 13.36% 0.85% 14.21% 0 (23,457)

South Dade
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 0 0 0 $0.00 0.00% 0.00% 0.00% 0.00% 0 0
Class B 454,723 90,157 0 $24.80 80.17% 19.83% 0.00% 19.83% 0 19,214
Total 454,723 90,157 0 $24.80 80.17% 19.83% 0.00% 19.83% 0 19,214

Reporting Methodology: This report includes all class 'A' and 'B' office buildings and parks 20,000 SF and greater in Miami‐Dade County that are not owner occupied, office medical, or government owned. All rents are reported on a full‐service gross basis and 
are direct weighted averages calculated on total available space.  The information in this report has been collected by the Avison Young research team via sources that are deemed reliable but is not guaranteed.

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 Miami-Dade County Office Market Report
Second Quarter
Orlando 2018
Office Market Report

Leading Indicators (Y-O-Y 2Q-2017 to 2Q-2018)

Asking full-service rental rates in Vacancy
Rate
Net
Absorption
Average Asking
Rate (FS)
New
Construction
Total
Employment
Miami-Dade County have grown
by over 2.6% since year-end 2017.
9.35% 532,693 SF $38.06 1,021,357 SF 1.35 MM

Miami‐Dade County
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 25,857,060 2,345,706 200,512 $45.32 90.93% 9.07% 0.78% 9.85% 855,652 265,722
Class B 30,394,301 2,646,067 67,131 $31.59 91.29% 8.71% 0.22% 8.93% 165,705 266,971
Total 56,251,361 4,991,773 267,643 $38.06 91.13% 8.87% 0.48% 9.35% 1,021,357 532,693

CBD
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 9,891,325 1,231,282 58,619 $50.97 87.55% 12.45% 0.59% 13.04% 194,352 (79,901)
Class B 6,615,374 828,242 29,916 $32.68 87.48% 12.52% 0.45% 12.97% 0 64,302
Total 16,506,699 2,059,524 88,535 $43.61 87.52% 12.48% 0.54% 13.01% 194,352 (15,599)

Non‐CBD
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 15,965,735 1,114,424 141,893 $39.08 93.02% 6.98% 0.89% 7.87% 661,300 345,623
Class B 23,778,927 1,817,825 37,215 $31.10 92.36% 7.64% 0.16% 7.80% 165,705 202,669
Total 39,744,662 2,932,249 179,108 $34.15 92.62% 7.38% 0.45% 7.83% 827,005 548,292

Significant Second Quarter 2018 Lease Transactions - Sorted by SF

Tenant Property Type SF Submarket
Viacom Three Miami Central New 24,000 Downtown Miami
Duane Morris Citigroup Center New 23,128 Downtown Miami
Ole Media Services 2525 Ponce de Leon Blvd New 21,161 Coral Gables
CONCACAF Three Miami Central New 17,000 Downtown Miami
Social Security Administration 3663 SW 8th Street New 9,293 South Gables / South Miami
CURA Leaf Cutler Bay Town Center New 8,100 Kendall
Atlantic Pacific Corporation Three MiamiCentral New 6,000 Downtown Miami

Significant Second Quarter 2018 Sales Transactions - Sorted by Sale Price

Property SF Sale Price Price/SF Buyer Submarket
Sabadell Financial Center 522,892 $250,000,000 $478 KKR / Cousins Properties Brickell
Suntrust International Center 420,857 $127,000,000 $302 Pacific Coast Capital Partners Downtown Miami
Kendall Summit 173,661 $34,750,000 $200 COFE Properties Kendall
Metro Mall 225,000 $12,300,000 $55 Aaron Realty Corp Downtown Miami

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correct, is not guaranteed by Avison Young.
 Miami-Dade County Office Market Report
Second Quarter
Orlando 2018
Office Market Report Year-End 2017

We s t Pa rk
821 852 441
BROWARD COUNTY
M i ra m a r
823 847
I ve s
7 E s tate s
Ave ntu ra G olde n
B e a ch Contact Information
854 95 Oj u s 856
MIAMI-DADE COUNTY M ia mi
Co u nt r y G a rde ns Su nny
Cl u b 860 N . M ia mi Is le s Donna Abood
B e a ch
821 826
826 B e a ch Principal and Managing Director
G olde n
27 75 Miami
823 817 9 G la de s 909 2020 Ponce de Leon Blvd, Suite 1200
L a ke s O p a - lo ck a 915 Nor th
916 M ia mi Bal Miami, FL 33134
Hialeah 924 Ha rb ou r
G a rd e n s We s t view
Bis c ay ne
922 305.446.0011
924
826
Pinewo o d
Pa rk Su r fs ide donna.abood@avisonyoung.com
Hialeah 1 M ia mi
932 A1A
M e d l ey
953 We s t Little Shore s
R ive r Michael T. Fay
997 934
G la deview Principal and Managing Director
95
2020 Ponce de Leon Blvd, Suite 1200
M i a m i 27 Browns ville
441 907
D o ra l
Springs
112 Miami, FL 33134
948 195
821 Miami Int’l 9 M ia mi 305.447.7842
B e a ch
Swe e t wate r
Airport michael.fay@avisonyoung.com
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U n i ve r s i t y
Pa rk
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The
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Ke n d a l l Pi n e cre s t
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Co u nt r y
Th re e
L a ke s
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997
Wa l k 992 Principal
1 Pa l m e t to
R i ch m o n d B ay
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We s t
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South Miami Cu t l e r Keith Edelman

994 He i g ht s B ay
Principal
305.504.2033
Goulds

Pr i n ce to n SUBMARKETS Scott Goldstein

MIAMI LAKES NE DADE Principal
821
305.504.2041
N a ra n j a
MEDLEY-HIALEAH AVENTURA

Le i s u re Ho m e s te a d
Joe Abood
AIRPORT-DORAL BISCAYNE CORRIDOR
Ci t y Base Senior Associate
DOWNTOWN MIAMI MIAMI BEACH
305.447.7878
Ho m e s te a d

CORAL GABLES COCONUT GROVE Lena Weeks

Fl o r i da
Ci t y
Associate
S GABLES - S MIAMI BRICKELL 305.476.7852

9336 KENDALL S DADE

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