Miami’s unemployment rate (4.7%) at its lowest level since 2008
Miami’s wage growth exceeds the national rate, with nearly all gains over the last year occurring in services. House prices increased 7.5%, exceeding the statewide and national pace. Financial services will continue to provide a stable source of jobs and income over the next five years in Miami, which is home to the East Coast’s largest concentration of international banks south of New York City. Construction growth is especially robust, with major projects underway including the Miami Central train station and several new office buildings, as well as Miami Worldcenter, a mixed-use development with retail, residences, and a hotel. Miami is expected to continue outpacing national economic growth with a 3.9% rise in gross metro product in 2017, due in large part to developments such as these.
Investor and landlord confidence continues in 2017
Miami’s Class A buildings reached a $43+ PSF average quote at Q2 2017, representing a 14% increase since 2010. Prior to the beginning of the 2007 recession, this average asking rate stood at just above $32 PSF. With significant hikes among prime Class A buildings, the pricing spread between the CBD and Suburban sectors has widened to over $12.00 PSF for direct quoted rates. Looking at a new threshold, the priciest areas with average quotes above the $45 PSF mark are Brickell ($51.58 PSF), Suburban Aventura ($49.58 PSF) and Miami Beach ($47.03 PSF). In the second half of 2017, look to another bump in asking rates for several CBD Tier I assets. More than half of Suburban markets are quoting average Class A rates above the $40 PSF mark – a benchmark historically reserved for prime CBD assets.
The CBD leads 2017’s dispositions, but other submarkets saw strong sales too
Miami saw an abundance of sales transactions during the first half of 2017, with more than $1.8 billion in office sales. The 395,000 SF property at 1221 Brickell boasted a sale of $392 PSF and traded at $155 million, leading the market during this period. Also, the 228,000 SF Dadeland Towers South in Kendall traded for $36 million or $158 PSF.