Miami-Dade County Office Market Feels the Impact of COVID-19 as Tenants Implement Reopening Plans and Adapt to the New Normal
Several large lease deals in the second quarter of 2020 still closed, however, a
number of tenants are facing significant hardship as a result of COVID-19 and
its impact on the economy. Office tenants providing services to the aviation
and cruise line industry have been particularly hard hit and are seeking rent
relief and/or termination of leases. Meanwhile, prospective tenants are putting
a hold on any plans to expand or commit to new leases. Several deals that
were already in the works continued to close including two new leases in
Brickell - Morgan Lewis signed an 18,000 square foot lease at Brickell World
Plaza, and IberiaBank signed a 14,000 square foot lease at 1111 Brickell Avenue.
Nonetheless, market fundamentals are showing signs of distress as vacancy
rates begin to rise; Miami-Dade County’s vacancy rate increased by 50 basispoints
quarter-over-quarter to 9.5 percent at the end of the second quarter.
Meanwhile, net absorption recorded negative 480,000 square feet, the first
negative recording since the first quarter of 2019. A small delivery of 27,400
square feet was recorded in the second quarter, however, a heavy pipeline
of 3.7 million remains under construction. Looking forward, landlords are
considering increasing concessions for new tenants, however, rental rates so
far have remained stable.
