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BRICKELL SUPPLY
HIGHLIGHTS
Robust demand fundamentals following new supply deliveries and the end of the
Recession resulted in Brickell’s first Class A single-digit (reached this year) direct
vacancy rate since 2009. Absorption of supply has been noteworthy with record high
vacancy peaking at nearly 27.0% in 2011 and reduced to the current 9.2%. Premier
product dominated this submarket on a square footage basis with four new buildings
added to its inventory since 2010. In addition to new, modern and amenity-enhanced
office product, many existing buildings implemented upgrades and renovations making
Brickell one of Miami’s most desirable and competitive locations.
The four newest assets, which delivered a combined 1.5 million SF (2010-2016) boasted
impressive occupancy at third quarter 2017: Brickell City Centre’s (2016) two buildings
which approached the 90.0% leased mark, Brickell World Plaza (2011) was 90.0% leased
and 1450 Brickell (2010) was 96.0% leased. These assets also commanded some of the
highest asking rates in Miami.
Current Class A vacant sublease space remained in the 48,000-62,000 SF range since
2016, somewhat under the levels posted at the end of the Recession. Factoring in
sublets, Brickell’s overall Class A vacancy remained unchanged during 2017 at 10.5%.
Only one large contiguous (20,000+ SF) sublet was being marketed at third quarter.
Totaling 24,000 SF, the two top floors at Two Brickell City Centre were the last available
spaces left. By quarter’s end, leases were out for the balance of the building’s space.
Three Brickell City Centre has been fully leased since late 2016.
At the trophy 701 Brickell asset, the largest contiguous sublet offering remained on
AIG’s 19th floor for 15,000 SF with term through 2025. On a direct basis, 16,700 SF
was vacant on the 12th floor while the 25th floor will have 16,570 SF available by first
quarter 2018, when Bulltick vacates. The building was 97.0% leased at the end of the
quarter. Brickell’s largest contiguous office was nearly 37,000 SF on two high floors at
801 Brickell. A sublease offering with term through 2024, it is the former space for the
Royal Bank of Canada’s Swiss private bank. The Class A asset was 96.0% leased.
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
BRICKELL Average Direct Rental Rates, 2007-2Q 2017
Class A Class B
Quoted Rate PSF
-150,000
-100,000
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
BRICKELL Total Net Absorption, 2007-3Q 2017
Class A Class B
SF
YTD
Completions
Under
Construction
Existing
Inventory SF
Direct
Vacancy %
Total
Vacancy %
YTD Net
Absorption
Average Direct
RR PSF Quoted
Brickell
Class A
0
0
4,662,867
9.2%
10.5% 119,184
$52.45
Brickell
Class B
0
0
1,921,991
16.8%
17.9% -10,487
$35.70
Totals
0
0
6,584,748
11.4% 12.7% 108,697
$45.04
OFFICE MARKET STATISTICS
| 3Q 2017
SF
Quoted Rate PSF
BRICKELL OTAL NET ABSORPTION, 2007-3Q 2017
BRICKELL DIRECT VACANCY (%) 2007-3Q 2017
BRICKELL 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
BRICKELL Direct Vacancy (%), 2007-3Q 2017
Class A Class B
P ent
Class A
Class B
Class A
Class B
Clas A
Class B