Despite remote work trends, South Florida’s office market showed signs of a full rebound as asking rental rates surpassed pre-pandemic levels, according to recently released data from Colliers.
Among the three counties, Miami-Dade County’s per-square-footage average asking rate of $44.72 was still the highest in the fourth quarter of 2021. That’s a 15.14% increase from the same quarter in 2019, before Covid-19 surges made working from home the norm for many companies.
In contrast, Broward’s average asking rate was $35.47 in the fourth quarter of 2021, which is 13.4% higher compared to two years ago. Palm Beach County’s was $37.25, up 13.29% from the fourth quarter of 2019.
In the Class A office category coveted by businesses wishing to recruit talent and encourage employees to return to the workplace, the rise in per-square-footage asking rates during pandemic times were more modest: up 9.84% to $50.58 for Miami-Dade, 5.9% to $40.30 for Broward, and 8.24% to $43.76 for Palm Beach County.
During that time, Palm Beach County’s office vacancy rate was 9.7%, the lowest of the three counties. In contrast, Miami-Dade had a vacancy rate of 11%, while Broward’s was 12.5%, Colliers reported.
Unlike the other three counties, Palm Beach County’s vacancy rate was even lower than the pre-pandemic fourth quarter of 2019, when it was at 10.7%. During that same quarter two years ago, Miami-Dade’s vacancy rate was 9.1% and Broward’s was 9.7%
“That’s because a growing number of financial companies are migrating from other parts of the United States and setting up shop in downtown West Palm Beach, particularly the substantially completed 270,000-square-foot 360 Rosemary that’s being developed by Stephen Ross, chairman of the Related Cos. in New York,” said Michael Falk, a managing executive director from Colliers’ West Palm Beach office.
These companies aren’t flocking to the area for a bargain: West Palm Beach’s central business district had an average asking rate of $66.07 a square foot ($70.50 for Class A), the highest rate of South Florida’s submarkets during the fourth quarter of 2021.
West Palm Beach’s office boom didn’t just benefit the downtown area. Falk said it had a positive “ripple effect” in other parts of the county, where offices are being repositioned and upgraded, resulting in higher rates and better product in other parts of the county.
“Trends are improving for Broward, too,” said Jonathan Kingsley, executive managing director of office services in Colliers’ Fort Lauderdale office.
He pointed out that Broward gained 218,822 square feet of newly filled tenant space in the third quarter of 2021, and another 150,917 square feet in the following quarter.
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