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.
Though the retail market in Miami was hit hard by the coronavirus pandemic with mandated closures of retailers throughout 2020, vacancies have now compressed to a three-year low. The vacancy rate is 3.6% with a 3.2% 12-month rent growth. Rents are about 2% higher than they were a year ago and in line with the National Index.
The Coral Gables retail market still has 786,000 SF currently under construction over three buildings, which ranks as the first submarket in the metro-Miami pipeline. Market rents average $39.05 per SF at the end of Q3 2021, which is an increase of 3.3% rent growth. Turnover is still low, but retail investment volume has increased in recent quarters.
The 12-month sales volume for the Miami retail market is $1,626,690,713 at a 123.2% 12-month sale volume growth. The market sales price is $384/SF.
Miami’s office sector is showing signs of strengthening, boosted by an impressive Q3 2021. Total leasing volume passed 1.2 million SF in both Q2 2021 and Q3 2021, outpacing the region’s five-year quarterly average.
In the office sector, vacancy dipped to 10.4% with 109,125,279 SF available at Q3 2021 with the average market rent at $39.90 per SF. There is 3,615,601 SF of office space under construction, which is 20% less than what was under construction in March 2020 but elevated compared to prior decade norms. In Q4 2020, 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.
Miami ranks as one of the top metros in the country for year-over-year rent gains, with a trailing 12-month growth of 3.5%, compared to the national average of -0.4%.
Over the past few quarters, office sales activity has increased. This is being driven by national and institutional investors acquiring high-end assets. The current market sales price is $339/SF with a 12-month sales volume of $2,171,765,259.
Despite a dip in overall economic activity, the office sector has done quite well. Employment is well above pre-pandemic levels in both the professional and business services and financial activities sectors, meaning that more companies may be looking for space in the coming months. Same-store market pricing has appreciated over the past few quarters, contrary to the national trend of flat values, meaning that in Miami, few deals are trading for a discount.