Capital Markets Florida Team

OFFICE FAST FACTS

Q3 2023

The Latest Trends in Florida’s Office Markets – Pushing Back Against Rising Interest Rates

MIAMI

LEASING ACTIVITY REMAINS LEVEL

JACKSONVILLE over the past four quarters. Although market fundamentals have slowed, landlords have yet to concede on asking rents, especially in Class A product and particularly in the Brickell Avenue submarket. DEMAND BALANCED BETWEEN ASSETS Neither flight-to-quality nor flight-to-value held a strong majority, with Class A and B having 47.2% and 52.8% of YTD leasing activity respectively. RENTAL RATES ON THE RISE The CBD’s overall average asking rate has increased 12.3% YOY with both classes of space, experiencing consecutive growth

TAMPA BAY Leasing activity in Q3 remained level from the previous quarter with 471,000 SF of new deals signed, bringing over 1.7 MSF of leases signed YTD. The flight to quality held with 64.8% of new deals signed in Class A product. LEASING ACTIVITY SURGES In Q3, leasing activity picked up with over 811,000 SF of new deals signed, with Class A assets comprising 67.8% of the activity. Through Q3 2023, Tampa Bay recorded 2.1 msf of new deals ranking #1 in the nation for leasing as a percentage of inventory.

SUBLEASE SPACE DIMINISHED

OVERALL RENTS FLATTENED

Tampa Bay’s labor market continued to exhibit growth throughout the third quarter with nonfarm employment increasing 3.1% YOY, representing an increase of 45,900 jobs and surpassing all other metropolitan areas in the state.

Overall asking rents for office space were the same from one year ago, at $22.76 PSF FSG as newly vacant class B rents held back average growth. Rents in Class A assets closed out the quarter at $24.70 PSF, up 1.2% YOY.

ORLANDO

ACTIVITY DOWN ANNUALLY

MODEST RENT GROWTH Asking rate averages rose 2.7% YOY to $26.61 PSF FSG. Rents in Class A assets closed out the quarter at $28.88 PSF FSG overall, up 1.6% YOY, as landlords held firm on rates to combat increased operating expenses despite economic headwinds.

Orlando recorded 427,000 SF of leasing activity in the third quarter, bringing the YTD total to 1.6 MSF. This was down 10.1% YOY, but higher than the volumes through the same periods in 2021 and 2020.