Class A Office Market Rental Rates Increased 6.6 Percent Statewide on Strong Tenant Demand

Cushman & Wakefield today announced the release of its Mid-Year 2016 Florida Statewide Rental Report (FLRR). This report highlights current office asking rates in major markets across the state and compares them to rates documented at the height of the last real estate cycle (2008–09).

Key findings in the Mid-Year 2016 FLRR include:

• The latest jobs report shows that Florida added 244,500 new jobs over the past year, an increase of 3.0 percent. Office-using employment increased by more than 60,000 jobs, driving demand for office space.
• Statewide, full-service asking rental rates for Class A office space increased 6.6 percent over the past year to $32.27 with four of six markets posting rental gains of more than $2.00 per square foot (PSF) over the past four quarters.
• Statewide, full-service asking rents for Class A space have surpassed rent peaks from the last cycle.
• Since the end of 2009, Florida’s Class A office market has seen 11.3 million square feet of available space absorbed by new and existing tenants, representing a 6.8 percentage point drop in the direct vacancy rate through the first half of 2016.

“Cushman & Wakefield continues to be bullish on the office market statewide,” said Larry Richey, Managing Principal and Florida Market Leader. “In the short term, rents jumped significantly on ever-tightening availability options. We are acutely challenged in several markets in providing space options for larger tenants, especially in Class A space in the CBDs. The shift in demographics to more urban, live-work-play environments and tenant demand should build confidence with developers and lenders for new construction.”

Florida Research Manager Chris Owen believes the market will remain positive in 2016.

“Supply side constraints in most markets are pushing office market fundamentals close to the record highs from the previous decade,” Owen said. “Besides Miami and some smaller projects across the state, the bulk of new major office construction has been build-to-suits. The steady lease up of new construction in Miami indicates, that with the right project, space will be leased.”

The Florida Statewide Rental Report is intended to provide market intelligence for property owners, occupiers and prospects. The report documents the gross average asking rate for the market and a short-term indicator noting the year-over-year change in that rate. Historical market performance is depicted by a clear and concise up or down indicator. This indicator shows rental rate growth as a percentage as well as the highest asking rent achieved in each market during the last real estate cycle.

Rates are full-service and based on Class A properties. The index gives a macro view of the overall markets and how they compare. It also provides a statewide rental figure and its fluctuation over the past 12 months.

About Cushman & Wakefield

Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 43,000 employees in more than 60 countries help investors and occupiers optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visitwww.cushmanwakefield.com or follow @CushWake on Twitter.