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Miami's commercial real estate market

» Between international money flowing in and companies positioning themselves to benefit from port projects and trade, Miami is a market like no other in Florida.“We’ve got kind of a perfect storm in a positive way working for us here in south Florida,” says Ken Krasnow, managing director at CBRE. “We are seeing a pretty good picture, a nice landscape out there, pretty much across all of our product types, office, industrial, retail, multifamily, hotel. Some are accelerating at a real fast pace. Some have eclipsed peak pricing and activity.”

» Swire Properties’ $1-billion, mixed-use Brickell CityCentreproject, with 505,000 square feet of retail, dominates all retail discussion. And it’s growing. When the owners of 700 Brickell put their 1.5-acre site on the market, CBRE held several rounds of bidding for more than a dozen interested groups before Swire won the competition in July by paying $64 million. Swire will build an 80-story tower on the site, which it’s adding to CityCenter.

» Core Class A offices are coming back,though the overall office vacancy rate still looks weak. Landlord concessions are dwindling — fewer free months, less money for tenant buildouts. With the competition from condo developers bidding up site prices, office development will be constricted, which augurs well for existing landlords.

Biggest New Lease Deal

The industrial market in Miami-Dade is the most in demand. Industrial Income Trust signed OHL, a logistics company, to a 185,520-sq.-ft. lease at its new industrial development in Medley. OHL was the third major deal in a month in north Miami-Dade and south Broward. OHL moved from within north Miami-Dade but increased its space by 50%. As of July, it was the largest new lease in Miami’s market this year, says Jones Lang LaSalle, which represented the landlord. “The OHL lease demonstrates the demand for newly built industrial space, while further positioning Medley as an attractive submarket,” says Steve Medwin (above), managing director at Jones Lang LaSalle.

Miami - Commercial Market
  Vacancy Rate Avg. Asking Rent
Sector Quarter 2 2012 Quarter 2 2013 Quarter 2 2012 Quarter 2 2013
Industrial 8.3% 6.9% $4.60 $4.87
Retail 4.0% 4.0% $27.41 $27.69
Office 19.6% 18.1% $31.45 $31.19
Source: Jones Lang LaSalle