Coral Gables Office Market Performance Outpaces All Other Miami Submarkets

The Coral Gables office submarket is leading the way in terms of office market absorption, according to preliminary statistics by CBRE.
Tenants took down approximately 180,000 square feet of office space in Coral Gables during the first three quarters of 2014, more than any other submarket by a wide margin.
Airport/Doral, the next busiest submarket, saw approximately 140,000 square feet of space absorbed.
The Brickell submarket experienced year-to-date absorption of approximately 126,000 square feet. As a result, vacancy in Coral Gables dropped to 13.3% during Q3 2014, its lowest point since 2010, according to preliminary statistics from CBRE.
Beacon Health Strategies, a new-to-submarket multinational behavioral health organization, signed the largest lease so far this year in Coral Gables, occupying 17,217 square feet at The Alhambra, a Class A property in the heart of Coral Gables, whose lease up went from 52% to 75% in less than 16 months. CBRE represented the landlord, an affiliate of USAA Real Estate Company, the largest owners of Class A office space in Coral Gables.
Leasing professionals attribute Coral Gables’ strong performance this year to a number of factors, including a tightening of quality Class A space in urban submarkets as well as desirable amenities, such as higher parking ratios, available in suburban markets.

“Historically, Brickell has been the darling submarket, but lately we have seen a lot of tenants relocating from the Central Business District to Coral Gables because they like the ample parking, convenient access to Miami International Airport and the rich cultural/entertainment/dining options offered by Coral Gables’ ‘Miracle Mile,’” said CBRE’s Diana Parker

Added CBRE’s Maggie Kurtz, “There is also a small tech hub forming both at The Alhambra and at Columbus Center, across the street. The clustering of tech-oriented talent is a key driver of both demand for office space and underlying property performance, especially in top submarkets where rent premiums have widened. We’re already seeing some of the impact on the pricing in that area.”

According to Parker and Kurtz, Coral Gables rates have risen approximately $1.50 per square foot over the past quarter, placing the direct asking lease rates at $37.00 to $43.00 per square foot (full service gross).
Parker and Kurtz handle the leasing for over 1 million square feet of Class A office space owned by USAA Realco affiliates in Miami-Dade County.