After two difficult years, the Florida commercial real estate market started to regain footing in 2010 with renewed leasing activity, a re-emergence of the investment property sales market and a stabilization of rental rates and property values,
according to Florida Market Perspective 2010–2011, a comprehensive assessment and outlook on commercial real estate throughout the state, released by CB Richard Ellis (CBRE).
“2010 will be remembered as the year that Florida began a slow and steady climb out of the recession,” says Mary Jo Eaton, Senior Managing Director for CBRE in Florida. “Market dynamics have started to improve and we’re seeing increased activity and interest throughout the state. As we head into 2011, leasing and sales are on the rise, capital is more available and economic indicators are heading in the right direction. We are guardedly optimistic that Florida is poised to see additional forward momentum this year and beyond.”
- Miami-Dade, Broward, Palm Beach and Southwest Florida counties all saw positive net absorption in the retail, office and industrial sectors by year-end. The Orlando, Jacksonville, and Tampa Bay markets all saw improvements in these sectors, either reporting positive or flat rates of net absorption or experiencing sharp declines in rates of negative absorption.
- Overall vacancy rates for office, retail and industrial throughout the state fell to 11.6% in 2010, the first annual decrease since 2006 when vacancy stood at 5.2% and began its incline of over 30% annually through 2009.
- Miami-Dade County was the largest contributor to the upward movement, posting almost five million square feet of absorption. However, Miami-Dade also has the greatest amount of product under construction with almost one million square feet.
- Across the state, almost two million square feet remains under construction, a marked drop since 2007 when there was almost 40 million square feet in the construction pipeline.
Across Florida, a ‘silver lining’ is evident as the analysis of 2010 figures reveals 2011 trends. Rates are showing signs of stabilization in Broward County with the spread between ‘asking lease rate’ and ‘actual lease rate’ narrowing. In Palm Beach County, the biotechnology industry continues to grow with several expansions and relocations to this area. Flight to quality by tenants seeking high quality space at lower rents continues in the Southwest Florida markets as landlords offer concessions and other means to remain competitive in order to retain tenants. In the Tampa Bay area, 2010 saw several buildings trade providing a foundation from which to underwrite deals in 2011. The Orlando market is seeing companies with larger space requirements continue to surface as leasing and sales activity continue to accelerate. Jacksonville is looking to the Port of Jacksonville to bring some overdue economic relief. CBRE’s Florida Market Perspective 2010–2011 reports on seven major markets in Florida, covering office, industrial, retail, and multifamily properties, and land. For the complete look at commercial real estate in Florida, go to www.cbre.com/fmp.
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