Walter Page, Director of Office Property Research for CoStar, provides and update on the Office Market in this video from The Commercial Real Estate Show. This update on the office property market includes performance, construction, and supply.
Walter presents and discusses a chart of new office property construction versus norms by city, a chart – grouped as to whether new construction is less or more than historical norms and then sorted by the proportion of new construction to existing square footage – that in which Miami sits right in the middle. Eyeballing it, Miami’s new office construction appears to be a bit under 20% higher than historical norms.
He then reviews a chart on rent growth year over year for prime/suburban office properties versus secondary business districts, noting a narrowing spread in rent growth rates between them.
A third chart reviewed is newer office building property (less than 10 years old) vacancy rates by city, illustrating where this metric lies as under construction supply is considered, i.e. where vacancy rates would be if all this new office property was available now. Of 25 markets represented, Miami (also see Miami office property trend charts) is the third highest when available under construction office properties are considered, i.e. the third worst. Of course, what this chart doesn’t take into account is how growth in Miami may cut into this soon to be available supply, but it is an interesting metric to note, regardless.