NEW-Miami Occupier and Pricing Trends_C&W Q3 2023 RFS

WYNWOOD / BISCAYNE / DESIGN DISTRICT

WYNWOOD / BISCAYNE / DESIGN DISTRICT DIRECT VACANCY (%) 2019 - Q3 2023

Percent

10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0%

SUPPLY HIGHLIGHTS Over 900,000 sf has delivered since 2019 with most of the new product developed within the Wynwood corridor. This was the contributing factor to the Class A segment’s overall vacancy peaking to nearly 50.0% during 2021. The submarket, once known as the Biscayne Submarket, covers an area just North of Downtown Miami up through NE 46th St. between Biscayne Blvd. and west to Interstate 95, making it easily accessible. It is considered Miami’s newest office submarket and is comprised of just over 2.3 msf of office inventory and another half-million sf under construction. The smaller inventory set is prone to significant fluctuations as it develops into a key suburban submarket.

0.0% 5.0%

2019

2020

2021

2022

2023

OFFICE MARKET STATISTICS | Q3 2023

Class A

Class B

Class A Class B

Average Direct RR PSF Quoted

Total Vacancy %

YTD Net Absorption

YTD Completions

Under Construction

Existing Inventory SF

Direct Vacancy %

WYNWOOD / BISCAYNE / DESIGN DISTRICT TOTAL NET ABSORPTION, 2019 - Q3 2023

Wynwood / Biscayne Design District Class A Wynwood / Biscayne Design District Class B

SF

46,678

180,000

1,104,006

28.7%

29.2% 135,930

$77.62

(100,000) (50,000) 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

0

329,000

1,247,951

9.6%

9.8%

2,288

$45.22

Totals

46,678

509,000 2,351,957

18.6%

18.9% 138,218

$66.25

PRICING HIGHLIGHTS Direct rent growth slowed significantly with a 40 bps YOY increase to $66.25 psf FSG. This can be attributed to slight increases in quarterly rates within newly built Class A space. Notably, the average rates come in higher than the CBD’s downtown Miami corridor and will likely remain so even as more space becomes leased in higher-end office buildings, asking rents in lower-tier Class B buildings should have more of an impact to weighted averages. DEMAND HIGHLIGHTS Since the majority of new office product came online during the peak of the pandemic, higher-end office space has steadily declined to just under the 30.0% threshold as companies look to the submarket as a trendy alternative to Miami’s CBD. Overall vacancy decreased 420 bps YOY to 18.9%, with Class A vacant space falling by 4.3% from the close of Q3 one year ago. This marked the steepest dip out of all Miami’s key office submarkets. Leasing activity totaled over 219,000 sf YTD, placing the submarket fourth in deal activity and just above the Brickell Avenue submarket.

2019

2020

2021

2022

2023

Class A

Class B

Class A Class B

WYNWOOD / BISCAYNE / DESIGN DISTRICTAVERAGE DIRECT RENTAL RATES, 2019 - Q3 2023

Quoted Rate PSF

$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00

2019

2020

2021

2022

2023

Class A Class B

Class A

Class B

Cushman & Wakefield of Florida, LLC. / 14