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Cushman & Wakefield of Florida, Inc.
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DOWNTOWN SUPPLY
HIGHLIGHTS
Among the 100 Class A office buildings in the Miami market, only 12 comprise 400,000
SF or more – all of which were located in the CBD, with six each in Brickell and Downtown.
On a square footage basis, Downtown contained the largest volume, due in part to
housing the largest (1.2 million SF) premier asset in Florida, Southeast Financial Center.
The six Downtown trophy towers made up the Class A competitive set, along with the
smaller 243,000 SF Museum Tower building.
Class A buildings posted double digit vacancies and continued its upward movement
over the last four quarters. The effects of the Recession, the 2010 delivery of the
753,000 SF Wells Fargo Center along with competitive new product in Brickell as
well as the sheer size of the existing Downtown buildings all played a part in the high
vacancy rates. As for large contiguous Class A blocks, four of Downtown’s seven towers
contained all but one of Miami’s largest Class A blocks - ranging from 52,000 SF to two
buildings with 130,000 SF+ each.
Unchanged during the year, the 1.2 million SF Southeast Financial Center had two
significant contiguous offerings: 133,000 SF on floors 10 through 15 and another
45,000 SF Mezzanine/Annex space overlooking the retail plaza. This was Wells Fargo’s
space, who will vacate all of their offices by year-end 2017 and relocate in-market to
their Downtown namesake tower, Wells Fargo Center. Southeast Financial Center was
82.0% leased, a figure that remains relatively stable as the tower typically maintains
1.0+ million SF under lease.
Additional large contiguous spaces that were vacant included Citigroup Center’s
130,000 SF and five high floors totaling 90,000 SF at SunTrust International. The
architecturally distinct Miami Tower was marketing a contiguous 45,000 SF (floors 18
and 19) at the close of the quarter. Also at Miami Tower, a high floor (36th) sublet
was put on the market at midyear 2017, totaling nearly 15,000 SF with term through
midyear 2021.
YTD
Completions
Under
Construction
Existing
Inventory
SF
Direct
Vacancy
%
Total
Vacancy
%
YTD Net
Absorption
Average
Direct RR
PSF Quoted
Downtown
Class A
0
318,000 4,796,516 19.3%
19.7% -66,848
$44.83
Downtown
Class B
0
0
1,932,997 22.1%
22.1% -47,092
$27.98
Totals
0
318,000 6,729,513 20.1%
20.4% -113,940
$39.37
SF
OFFICE MARKET STATISTICS
| 3Q 2017
Quoted Rate PSF
DOWNTOWN DIRECT VACANCY (%) 2007-3Q 2017
DOWNTOWN TOTAL NET ABSORPTION, 2007-3Q 2017
DOWNTOWN AVERAGE DIRECT RENTAL RATES, 2007-3Q 2017
Percent
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
DOWNTOWN Direct Vacancy (%), 2007-3Q 2017
Class A Class B
Percent
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
DOWNTOWN Average Direct Rental Rates, 2007-3Q 2017
Class A Class B
Quoted Rate PSF
Class A
Class B
Class A
Class B
Class A
Class B
-200,000
-150,000
-100,000
-50,000
0
50,000
100,000
150,000
200,000
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
DOWNTOWN Total Net Absorption, 2007-3Q 2017
Class A Class B
SF