MIAMI, April 5, 2013 /PRNewswire/ -- Newmark Grubb Knight Frank (NGKF), one of the world's leading commercial real estate advisory firms, shared its view on the South Florida commercial real estate market at the company's 2013 State of the Market event on April 4, 2013. The outlook was presented to clients at a reception featuring keynote speaker Robert Bach, national director, Market Analytics, as well as a number of NGKF market specialists.
Based on the company's proprietary research, market fundamentals have remained relatively steady over the past quarter across South Florida. The office vacancy rate fell slightly across the board, with Broward County ending the quarter with the lowest level in the region at 16.1%. The industrial sector also performed well, with vacancy inching downward in both Broward County and Palm Beach. Miami recorded quite a bit of activity; however, vacancy remained relatively flat due to the delivery of the 335,000-square-foot Miami International Distribution Center.
"Across South Florida, over 1.1 million square feet of office leasing activity was tracked in the first quarter," said Jon Bourbeau, vice chairman in NGKF's Miami office. "The majority of deals came from tenants already in the market in the form of expansions, renewals, relocations and, in some cases, contractions, but the pendulum appears to have swung with demand outpacing supply."As a result of this market improvement, and the fact that new development across South Florida has been kept in check, asking rents for both office and industrial product are expected to increase moderately over the next several quarters, and landlords will feel less compelled to offer leasing concessions as the year progresses. Still, stronger signals of widespread economic recovery are needed before robust growth takes hold. Mr. Bach explained that improving market fundamentals, especially job growth, retail sales and the housing market, bode well for commercial real estate on a national basis, and said that South Florida in particular is benefiting from a rebound in the residential sector. "The spike in demand for residential real estate is a harbinger of stronger growth on the commercial side," Mr. Bach said. "This is especially true for retail, as homeowners look to remodel existing properties or homebuilders deliver new projects."