CORAL GABLES MARKET OVERVIEW
The Coral Gables market remains a destination for multinational companies searching for space. With approximately 200 multinational companies currently calling it home, Coral Gables truly is an international community.
RETAIL OVERVIEW
Vacancy: 4.1%
12 Mo Net Absorption: 554,721
Rent/SF: $37.84
Inventory: 137,298,150 SF
Under Construction: 3,033,500 SF
Sale Price/SF: $380
Source: CoStar
OFFICE OVERVIEW
Vacancy: 11.4%
12 Mo Net Absorption: -630,135 SF Rent/SF: $39.54
Inventory: 109,585,868
Under Construction: 3,468,530 SF
Sale Price/SF: $316
Source: CoStar
The retail market in Miami has been hit hard by the coronavirus pandemic with mandated closures of shops, restaurants, health and grooming, and other retailers throughout 2020. Annual rent growth has slowed steeply over the past two years and rents are in line with what they were a year ago. This flat annual growth slightly underperforms the nearly 1% annual growth in the National Index and ranks Miami among the lowest rent growth metros in Florida. The Coral Gables retail market still has 3,033,500 SF currently under construction over 3 buildings, which ranks as the eighth submarket in the metro-Miami pipeline. Market rents average $37.84 per SF at the end of Q2 2021, which is an increase of 0.3% in rent growth. The vacancy rate is down to 4.1% in Q2 2021. Miami has some of the most ongoing retail development in the nation, and 2021 is slated to see a three-year high in retail deliveries for the market. The 12-month sales volume for the Coral Gables retail market is $1,443,076,871 at a 109.7% 12-month sale volume growth. The market sales price is $380/SF.
In the office sector, vacancy rose to 11.4% with 109,585,868 SF available at Q2 2021 with the average market rent at $39.54 per SF. There is more than 3.4 million SF of office space under construction, which is 30% less than what was under construction in March 2020. In 20Q4, work was completed on the North Tower at The Plaza Coral Gables. The South Tower is under construction and set to deliver late this year. The combined 537,000 SF of 4- & 5-Star office space will expand the submarket’s inventory by nearly 5%. There is 300,000 SF of space that remains available in the project, at asking rents between $55-$62/SF.
Over the past year, the makeup of buyers and sellers shows that institutional investors have shifted their attention to other markets, as that group made up only 15% of buyers as opposed to 31% of sellers in terms of sales volume. Private equity accounted for 5% of volume as sellers but were buyers for 20%. Structural changes to office demands could increase or hinder office valuations. A shift to more space per employee could increase office demand, whereas more companies adopting a work-from-home or hybrid policy could also change demand for office space. The current market sales price is $316/SF with a 12-month sales volume of $1,718,984,548.
Despite muted leasing and rising vacancies in the short term, we believe the Coral Gables office market will have a strong recovery. Now may be a good time to secure a favorable lease rate on office space while inventory exists, giving tenants more options for affordable rents, especially if entering large, long-term commitments.
ComReal | Miami-Coral Gables, LLC 51 Merrick Way. Coral Gables, FL info@comreal.com.