Miami-Dade Office Market: An Overview of 2022 and First Quarter of 2023

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The article will discuss the recent increase in office occupancy in Miami-Dade County, which has outperformed other major U.S. markets despite economic headwinds such as higher interest rates and tighter financial conditions.

The article will cover You will look at the county's absorption rate, vacancy rate, and rental growth, and compare them to the county's rent growth. with other entry markets. Additionally, the article will provide A brief overview of Miami-Dade's dynamic economy and its appeal to global law, finance and technology firms.

Table of contents

  • Introduction
  • Office occupancy in Miami-Dade in 2022 and first quarter of 2023
    • Absorption rate comparison
    • Net Absorption by Submarkets
    • Comparison of vacancy rates
    • Comparison of income growth
  • Miami-Dade's dynamic economy
    • Population growth
    • Increased immigration
    • Call to global technology, finance and law firms
  • Conclusion

Miami-Dade's Office Occupancy in 2022 and Q1 2023

The Miami-Dade County office market has seen an increase in occupancy despite the economic headwinds of higher interest rates and tighter financial conditions. During 2022 and the first quarter of 2023, Miami-Dade County absorbed 0.63 million square feet (MSF) of office space, surpassing other major gateway markets such as Atlanta and Dallas. In contrast, nationally, office occupancy fell by 64 million square feet during the same period.

Absorption rate comparison

Compared to other major markets, Miami-Dade's absorption rate is impressive. For example, Chicago lost 6.5 MSF, San Francisco lost 5.1 MSF and New York lost 0.65 MSF of office space during the same period. The county's major submarkets experienced positive net absorption during 2022 and the first quarter of 2023, except for the airport submarket, which experienced positive net absorption. a decrease in occupancy due to Ryder System leasing 238,000 square feet of office space in the Miami airport area.

Net Absorption by Submarkets

Miami-Dade submarkets experienced positive net absorption during 2022 and the first quarter of 2023. The Biscayne/Wynwood/Design District submarket absorbed 429,000 square feet, followed by Coral Gables with 206,000 square feet, Brickell with 204,000 square feet, Coconut Grove with 86,000 square feet and downtown Miami with 76,000 square feet. SF.

Comparison of vacancy rates

Miami-Dade's vacancy rate as of the first quarter of 2023 was 15.8%, lower than the national rate of 18.6%. In contrast, other major markets such as the Los Angeles central business district, San Francisco, downtown New York, and Chicago had vacancy rates above 20%. New York and San Francisco had high overall vacancy rates due to the large amount of indirectly vacant space being subleased, which represented about 7% of office inventory.

Comparison of income growth

Miami-Dade's lower vacancy rate led to a 3.3% year-over-year increase in average county office asking rents as of the first quarter of 2023. In contrast, nationally, Office asking rents increased 1%, but decreased year over year in the New York Downtown submarket (-1.6%), Washington DC (-1.8%), and San Francisco (-6.2%). %).

Miami-Dade's dynamic economy

Miami-Dade County's strong economy, sustained out-of-state migration and low corporate tax rate have attracted global tech,  Miami-Dade has witnessed the relocation and expansion of large technology, finance and law companies, attracted by the strength of its economy, sustained out-of-state migration and its decline corporate tax rate. here There are a few facts that reflect the strength and resilience of Miami-Dade County since the COVID pandemic:

Miami-Dade is the seventh largest county in the United States, with an estimated population of 2,701,762 in 2022. In 2021, Miami-Dade's population surpassed that of Kings County, New York. Its population is larger than that of Dallas County, Texas (2,611,491) and Kings County, New York (2,736,075), according to U.S. Census Bureau Population Estimates through July 2022.

Miami-Dade County is experiencing an increase in the number of people moving from other US states, driven by quality of life, lack of state income tax, low cost of living, and warm weather during all year round. Florida has also been a popular alternative for businesses and employees looking to escape the high costs and regulations in states like New York and California.

Miami-Dade County has a diverse economy that is based on a wide range of sectors, including tourism, healthcare, construction, finance and technology. the information. The tourism sector, in particular, is a major economic driver for Miami-Dade County, attracting millions of tourists each year from around the world.

However, Miami-Dade's economy has also experienced a shift toward technology and finance. Miami-Dade's growing technology industry has been recognized in recent years with a number of awards and recognitions, such as the title of "Tech City of the South" by Time magazine. Miami is also getting better becoming an important startup center, with a series of incubators and accelerators for emerging businesses that have emerged in the region.

Miami-Dade's financial sector is also in trouble. growing rapidly, driven by the presence of international banks, investment funds and insurance companies. Many of these businesses are coming to Miami from New York and other larger cities, where costs of living and regulation are much higher.

Conclusion

In short, the Miami-Dade County office market is hot. outperforming the rest of the nation and other major markets, thanks to a combination of strong job gains, migration to the state, and the post-pandemic recovery in domestic and international tourism. With increased office occupancy, lower vacancy rate and stronger rent growth

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