Strong Job Growth Shows Promise of Further Recovery
Miami's market remained relatively steady throughout 2021, with 100,000 SF of negative net absorption while also increasing the office inventory by 300,000 SF.
Job growth experienced significant recovery during the year as there was a 5.1% growth in 2021.
Miami’s economy will lag slightly even though international travel regains momentum. While the area’s retail, cruise and tourism industries may be impacted for another six months or so, higher-wage office-using jobs are already recovering at an above-average clip, and financial services and international trade sectors are already expanding.
Sharp Increase in Rental Rates to End Year
The average asking rental rate for all classes of office space in Miami office market increased significantly in 2021, rising 9.6% throughout 2021, totaling $44.42 PSF as compared to $40.50 PSF at year-end 2020.
The office prime average rent at year-end 2021 also experienced a drastic rise in rental rate as it totals $48.31 PSF at year-end 2021, up from $44.24 in 2020.
The direct vacancy rate for the Miami Office Market saw a 70-basis point increase, now totaling 15.4%.
Resurgent Investment Sales Totals for 2021
Investment sales volume saw a surge as 2021 closed with the highest total volume since 2016, totaling $2.8 billion. Office investment sales accounted for 58% of all investment sales in 2021. The average office investment sales cap rate remained steady as it averaged 6.1%, only a 10-basis point decline from 2020 and is a return to 2019 averages.