With strong job growth and a soaring rents, occupancy growth has flattened out.

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Snapshot
• Across the tri-county area, rent growth has remained strong, which has been aided by an influx of new
construction. Since year-end 2018, rents in the region have grown 3.8 percent and currently sit 25.3 percent higher
than their 5-year average.
• That five year mark is also when new development began to occur for the first time since the Recession – the
pipeline has grown each year since and there is now more than 3.2 million square feet under construction. Over
45.0 percent of the new development is occurring in four notable CBD projects – 830 Brickell (Miami), The Main
(Fort Lauderdale), 360 Rosemary (West Palm Beach), and One West Palm (West Palm Beach). All projects are asking
well above their respective market averages, with 830 Brickell asking $73.00 p.s.f. – average Class A rents in Brickell
are currently $55.36 p.s.f.
• These promising metrics are occurring alongside some record growth in office using employment, which has
grown 2.7 percent since the start of 2018. Yet office occupancy growth appears to have plateaued, a trend
counterintuitive to the narrative given that it’s a primary driver of office fundamentals. Why is that?
• While there is myriad possible explanations, there are three primary reasons as it relates to the office market: 1)
South Florida has seen explosive growth in co-working space. In Miami’s CBD alone coworking operators lease
roughly 750,000 square feet of space, capturing office using job growth traditional office space would capture, 2)
companies have become more efficient with their space usage through workplace strategies and redesigned
offices or providing more flexibility for employees to work remotely, and 3) companies improving their workspaces
by relocating into new product.
Occupancy growth slows amid strong job gains while a
robust pipeline drives asking rates
Source: JLL Research, FRED
Marc L. Miller | marcl.miller@am.jll.com
November 12, 2019
South Florida
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