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, there has been a resurgent demand for retail space and the metro’s vacancy rate is now 3.4% with a 5.4% annual growth rate, outpacing the national average. Most of the 3.5 million SF underway is pre-leased, so new supply should not have much of an impact on rent growth in the near term.
The Coral Gables retail market still has 786,000 SF currently under construction over three buildings, with 84.8% pre-leased, which ranks as the first submarket in the metro-Miami pipeline. Market rents average $40.19 per SF at the end of Q4 2021, which is an increase of 5% in rent growth. Miami ranks as one of the priciest retail markets in the country.
The average market sales pricing of $390/SF is now above the metro’s pre-pandemic peak. Even older, well-leased buildings are seeing significant price appreciation. The 12-month sales volume for the Miami retail market is $1,578,003,190 at a 22% 12-month sale volume growth and a 5.6% market cap rate.
Miami’s office sector has shown recent improvement with a resurgence in leasing volume. Net absorption in Miami was positive at the end of 4Q21 and the vacancy rate has trended downward.
In the office sector, vacancy dipped to 10.4% with 110, 414, 060 SF available at Q4 2021 with the average market rent at $40.77 per SF. There is 2,782,747 SF of office space under construction, which is less than what was under construction in mid-2020 but elevated compared to prior decade norms. Current space under construction represents about 2.5% of the metro’s current inventory. Coral Gables has one building under construction with 164,000 SF and 38.5% leased.
Miami ranks as one of the top metros in the country for year-over-year rent gains, with 12-month growth of 4.1%. Office demand in Miami is benefiting from recent growth in the area’s office-using employment sectors. Total employment is way above pre-pandemic levels in office-using sectors.
Over the past few quarters, office sales activity has increased with few deals trading for a discount in Miami. The current market sales price is $340/SF with a 12-month sales volume of $2,449,613,944. The 12-month sales volume growth is 252.9% at a 6.1 market cap rate.
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. Microsoft, Blackstone, and Millennium Management have leased sizable office space in Miami, with the expectation of adding hundreds of high-paying jobs when fully staffed.