Monday, November 16th, 2009
MIAMI - Concerns earlier in the year about the effects of new supply on near-term office property performance measures in Miami-Dade County have eased, supplanted by the realization that job losses continue to weaken space demand, according to a fourth-quarter Office Research Report by Marcus & Millichap.
Projected completions for 2009 have been scaled back, as two developments totaling more than 1.1 msf have been delayed until 2010, presumably as a result of tepid pre-leasing.
“In the investment market, a slowdown in deal flow persists,” says Kirk Felici, regional manager of the Miami office of Marcus & Millichap.
Following are some of the most significant aspects of the Miami-Dade Office Research Report:
- Roughly 27,000 jobs are expected to be cut in the county this year, a decrease of 2.6%. Office-using employment is on track to be reduced by 5,900 workers. Total employment contracted 3.4%, or by 36,400 jobs, in 2008.
- With the deferral of two large projects until next year, builders will now complete 600,000sf in 2009. Last year, deliveries totaled 339,000sf.
- As employers continue to eliminate jobs and reduce space needs, the vacancy rate is forecast to climb 390 basis points this year to 15.3% on negative net absorption of 1.2 msf. In 2008, vacancy increased 270 basis points.
- In 2009, asking rents are projected to fall 2.7% to $29.85 psf. Effective rents are forecast to recede 5.9% to $24.07 psf. Asking rents rose 6.1% last year, accompanied by a 2.7% jump in effective rents
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