'Tighter Beach Office Market Seeing Record-Breaking Rates'

The Miami Beach office space market is seeing record-breaking asking rates, according to local office leasing experts. The asking rent rate in Miami Beach right now is as high as $120, which is an almost 30% increase year-over-year, said Stephen Rutchik, the vice chairman of office services at Colliers International.

“We're seeing continued growth in the rental rate market, and it comes to new construction, we have achieved over $200 a square foot,” he said. “The common denominator amongst all of the tenants we have executed leases with, or who have moved on these, especially in the new construction, are tenants who are new to South Florida. They generally are financial services.”

The vacancy rate is a very healthy single-digit number, and the most in-demand buildings are the newer ones, like Terra Group’s The Well and 18 Sunset, which are essentially fully leased, Mr. Rutchik added. “We should expect a continued increase in rates.”

The last 12 months of new product delivered to the market has a total of 109,000 square feet of class A office space thanks to The Well and about 82,000 square feet coming from 18 Sunset, agreed Bert Checa, a principal at Lee & Associates South Florida.

“Basically, the Beach market track right now is wealth management companies,” he said. “A lot of them are coming from Chicago and are relocating to South Florida based on tax benefits and regulations. We used to be around 23% vacant, and now it is only 10% vacant. So, Miami Beach has seen a 13 [percentage point] decrease in vacancy.”

Rolling into the new year, office space leasing rates are going to be between $100 and $150, and vacancies are going to be somewhere between 7% to 9%, Mr. Checa predicted.

“Miami Beach in comparison to the general Metro Miami, we are seeing a 4.8% above Miami's average rent range year-over-year,” he said.

About Lee & Associates South Florida

Lee & Associates South Florida is a fully vertical commercial real estate brokerage firm focused on industrial, office, retail, multifamily, investment and land sectors. Our dedicated team of professionals is led by Matthew Rotolante, CCIM, SIOR a 4th generation South Florida native in a family that has owned and operated commercial property here since 1928. Lee & Associates is the largest agent owned brokerage in the nation with Senior Agent’s ability to earn profit share resulting in the highest splits while still receiving full resources, support and leads from our national network. Our collaborative and cheerful culture allows for open communications throughout the company, fostering the sharing of information and best practices to better enable client decision making.  The Lee & Associates’ robust national network that sold and leased over $115 Billion in the last 5 years offers clients a cross-market platform of expertise and deal opportunities across all asset specialties and representation roles. For the latest news from Lee & Associates South Florida, visit leesouthflorida.com or follow us on Facebook, LinkedIn, Twitter and Instagram, our company local news.

About Lee & Associates

Lee & Associates is a commercial real estate brokerage sales, leasing and management firm. Established in 1979, Lee & Associates has grown its service platform to include over 75 offices in the United States and Canada. Lee & Associates is the largest agent owned commercial real estate brokerage where agents get the greatest return for their efforts and hence are more committed and better enabled to provide superior results for their customers.  For the latest news from Lee & Associates, visit lee-associates.com or follow us on Facebook, LinkedIn, Twitter and Link, our company blog.