Broward County Office Market Report

Second Quarter 2018

Persistent Demand for Quality Office Space Fueling New Development Projects
Broward County's overall economy continues to prosper from consistent population growth and declining
unemployment, and as of May 2018 the local unemployment rate was 3.2%, a 60 basis point (bps) drop
over the last 12 months. Office market fundamentals remain solid with demand for high quality space
largely outstripping available supply, and robust leasing taking place in primary submarkets. The overall
vacancy rate has declined by an impressive 210 bps in the trailing 12-month period, with the most significant
vacancy decline occurring in the Cypress Creek submarket (down 347 bps since mid-year 2017). Developers
remain disciplined and tenants are utilizing their spaces efficiently, reducing the likelihood that large scale
downsizing will be necessary in the event of a slowdown. Steady in-migration
Developers are targeting highly sought after areas for new office projects in order to satisfy growing
demand. The Edison Pembroke Pines, located in the Southwest Broward submarket, is a prime example.
and strong economic
According to TPA Group, The Edison Pembroke Pines will consist of two 165,000-sf office buildings with fundmentals are
a 5,000-sf shared center located between the two. The property will be amenity rich, incorporating high
ceilings and tenant amenity collaboration areas. In the Plantation submarket, insurance giant Aetna recently
fueling growth in
committed to an 85,000-sf lease at an existing class A building that is part of the $350 million Plantation Walk Broward County
mixed-use redevelopment project now underway. Aetna is the development's first office tenant, and will be
relocating from its current offices in Sunrise. The project's developer is currently working on securing lease
commitments with retailers and a grocer for the prominent live-work-play development.

Office Market Snapshot

„„ Office investment activity remains solid. While trailing 12-month
office transaction volume through the second quarter of 2018
is down 38% over the previous year, it still totals $617.5 million
and accounts for 3.8 million sf. Total volume for 2018 will likely
improve in the second half of the year as new deals are finalized.
93% of all office transaction volume for year-to-date 2018 has been
comprised of domestic institutional and private investors.
„„ Big-block office space is in high demand across the county.
Many developers have responded with new projects with large
floorplates that can accommodate tenants who require this type
of space.
submarket. The two-building, 153,188-sf class B portfolio was sold
by an affiliate of Starwood Capital Group for $27.6 million, or $180
per sf.
„„ Development activity in Downtown Fort Lauderdale continues
with two significant class A office projects underway. The 95,532-
sf 550 Building is under construction with a second quarter 2019
delivery date, and the 400,000-sf 201 East Las Olas building is
preparing to break ground in July with delivery expected in late
2020. Outside the urban core, TPA Group's The Edison Pembroke
Pines and Miramar Tech Center have also begun construction in
the Southwest Broward submarket.

„„ In-migration continues to fuel economic growth in Broward
County, with the population growing at an annualized rate of 1.3%.
„„ The largest office sale of the second quarter was IP Capital Partners'
acquisition of Sawgrass Commerce Center in the Sawgrass Park
„„ During the second quarter The Federal Reserve ('Fed') raised its
target range for the federal funds rate by another 25 basis points,
although the move has not affected cap rates to any measurable
degree as they remain at or near record lows. Additional rate hikes
are expected to be instituted by the Fed later this year.

32.4 MSF 401,493 SF 9.42% $35.65/SF/FS

Total office inventory in the Direct Y-T-D net absorption Overall Vacancy Average rental rate for
Broward County market as of 2Q-2018 class A space

Partnership. Performance. avisonyoung.com

 Broward County Office Market Report
Second Quarter
Orlando 2018
Office Market Report Year-End 2017

Vacancy Rate YTD Net Absorption (SF) Average Asking Rent Rate ($/SF/FS)

20% 300,000 $40.00

15% 200,000 $35.00

10% 100,000 $30.00

5% 0 $25.00

0% (100,000) $20.00
2014 2015 2016 2017 2Q18 Class A Class B 2014 2015 2016 2017 2Q18

Direct Sublet CBD Non-CBD Total Class A Class B Total

BROWARD COUNTY OFFICE MARKET AT A GLANCE

3.8% 3.2%
MAY-2017 MAY-2018
CHANGE IN BROWARD COUNTY
BRIGHTLINE IS A TRANSFORMATIVE
UNEMPLOYMENT RATE
TRANSPORTATION PROJECT, LINKING SOUTH SQUARE FEET CURRENTLY UNDER
FLORIDA FROM WEST PALM BEACH TO MIAMI CONSTRUCTION

RENTAL RATE INCREASE

OVER THE TRAILING 12-MOS
ENDING 2Q-2018
THERE IS A SURGE OF MULTIFAMILY
INCREASE IN TOTAL NON-FARM
DEVELOPMENT IN DOWNTOWN FORT
EMPLOYMENT SINCE 2Q-2017 LAUDERDALE

A RELATIVE LACK OF LARGE BLOCKS

CONSUMER CONFIDENCE IN BROWARD COUNTY
OF CONTIGUOUS SPACE IS LEADING TO IN TOTAL OFFICE SALES VOLUME DURING
REMAINS HIGH IN THE WAKE OF RECENT TAX
DEVELOPMENT OPPORTUNITY THE T-12 MONTHS ENDING 2Q18
REFORM

Partnership. Performance. avisonyoung.com

 Broward County Office Market Report
Second Quarter
Orlando 2018
Office Market Report Year-End 2017

Broward County
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 13,647,568 1,435,128 72,077 $35.65 89.48% 10.52% 0.53% 11.04% 391,710 289,060
Class B 18,801,566 1,496,728 52,897 $26.56 92.04% 7.96% 0.28% 8.24% 122,583 112,433
Total 32,449,134 2,931,856 124,974 $31.01 90.96% 9.04% 0.39% 9.42% 514,293 401,493

CBD
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 3,982,367 460,880 42,914 $41.46 88.43% 11.57% 1.08% 12.65% 0 87,000
Class B 1,064,631 55,492 0 $28.63 94.79% 5.21% 0.00% 5.21% 122,583 12,134
Total 5,046,998 516,372 42,914 $40.08 89.77% 10.23% 0.85% 11.08% 122,583 99,134

Non‐CBD
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 9,665,201 974,248 29,163 $32.90 89.92% 10.08% 0.30% 10.38% 391,710 202,060
Class B 17,736,935 1,441,236 52,897 $26.48 91.87% 8.13% 0.30% 8.42% 0 100,299
Total 27,402,136 2,415,484 82,060 $29.07 91.19% 8.81% 0.30% 9.11% 391,710 302,359

Cypress Creek
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 2,919,248 425,355 18,300 $30.47 85.43% 14.57% 0.63% 15.20% 0 27,439
Class B 3,031,178 434,152 38,533 $23.87 85.68% 14.32% 1.27% 15.59% 0 (3,429)
Total 5,950,426 859,507 56,833 $27.14 85.56% 14.44% 0.96% 15.40% 0 24,010

Central Broward
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 0 0 0 $0.00 0.00% 0.00% 0.00% 0.00% 0 0
Class B 3,347,156 358,706 2,445 $28.07 89.28% 10.72% 0.07% 10.79% 0 (18,593)
Total 3,347,156 358,706 2,445 $28.07 89.28% 10.72% 0.07% 10.79% 0 (18,593)

Downtown Fort Lauderdale
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 3,982,367 460,880 42,914 $41.46 88.43% 11.57% 1.08% 12.65% 0 87,000
Class B 1,064,631 55,492 0 $28.63 94.79% 5.21% 0.00% 5.21% 122,583 12,134
Total 5,046,998 516,372 42,914 $40.08 89.77% 10.23% 0.85% 11.08% 122,583 99,134

Hallandale
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 0 0 0 $0.00 0.00% 0.00% 0.00% 0.00% 0 0
Class B 500,355 29,017 30 $37.97 94.20% 5.80% 0.01% 5.81% 0 21,116
Total 500,355 29,017 30 $37.97 94.20% 5.80% 0.01% 5.81% 0 21,116

Hollywood
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 281,600 30,455 500 $35.40 89.19% 10.81% 0.18% 10.99% 0 1,388
Class B 1,571,172 95,551 0 $31.97 93.92% 6.08% 0.00% 6.08% 0 10,904
Total 1,852,772 126,006 500 $32.80 93.20% 6.80% 0.03% 6.83% 0 12,292

Northwest Broward
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 505,504 44,659 0 $31.08 91.17% 8.83% 0.00% 8.83% 0 18,039
Class B 1,357,479 111,530 1,633 $23.11 91.78% 8.22% 0.12% 8.34% 0 32,309
Total 1,862,983 156,189 1,633 $25.39 91.62% 8.38% 0.09% 8.47% 0 50,348

Plantation
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 1,461,223 154,114 0 $36.56 89.45% 10.55% 0.00% 10.55% 0 79,486
Class B 2,364,688 130,125 10,256 $27.31 94.50% 5.50% 0.43% 5.94% 0 12,517
Total 3,825,911 284,239 10,256 $32.33 92.57% 7.43% 0.27% 7.70% 0 92,003

Northeast Broward
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 375,692 32,270 0 $30.83 91.41% 8.59% 0.00% 8.59% 0 50,424
Class B 2,381,318 101,977 0 $24.32 95.72% 4.28% 0.00% 4.28% 0 (31,750)
Total 2,757,010 134,247 0 $25.88 95.13% 4.87% 0.00% 4.87% 0 18,674

Sawgrass Park
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 1,689,146 131,138 8,363 $33.65 93.91% 6.09% 0.90% 6.99% 0 9,782
Class B 1,228,718 124,584 0 $27.21 93.81% 6.19% 0.00% 6.19% 0 34,638
Total 2,917,864 255,722 8,363 $30.51 93.87% 6.13% 0.52% 6.65% 0 44,420

Southwest Broward
Class Breakdown Total RSF Direct Vacant SF Sublet Vacant SF Lease Rate % Occupied % Vacant % Sublet Vacancy % Total Vacancy Under Construction Net Absorption
Class A 2,432,788 156,257 2,000 $35.71 93.58% 6.42% 0.08% 6.51% 391,710 15,502
Class B 1,954,871 55,594 0 $28.37 97.16% 2.84% 0.00% 2.84% 0 42,587
Total 4,387,659 211,851 2,000 $33.79 95.17% 4.83% 0.05% 4.87% 391,710 58,089

Reporting Methodology: This report includes all class 'A' and 'B' office buildings and parks 20,000 SF and greater in Broward County that are not owner occupied, office medical, or government owned. All rents are reported on a full‐service gross basis 
and are direct weighted averages calculated on total available space.  The information in this report has been collected by the Avison Young research team via sources that are deemed reliable but is not guaranteed.

Partnership. Performance. avisonyoung.com

 Broward County Office Market Report
Second Quarter
Orlando 2018
Office Market Report

Leading Indicators (Y-O-Y 2Q-2017 to 2Q-2018)

In-migration continues to fuel
economic growth in Broward Vacancy Net Average Asking New Total
Rate Absorption Rate (FS) Construction Employment
County, with the population
growing at an annualized rate of
1.3%.
9.42% 401,493 SF $31.01 514,293 SF 1.01 MM

Significant Second Quarter 2018 Lease Transactions - Sorted by SF

Tenant Property Type SF Submarket

Aetna Plantation Walk New 85,000 Plantation

SR Technologies Sawgrass Technology Park New 77,000 Sawgrass Park

Cigna Corporate Centre II Renewal 47,879 Sawgrass Park

Patriot National Cypress Financial Center New 18,828 Cypress Creek

Caxa Group* One East Broward New 18,400 Downtown Fort Lauderdale

Rissman, Barrett, Hurt, Donahue,

Bayview Corporate Tower New 14,559 Cypress Creek
McLain & Mangan P.A.

Marcus & Millichap Cypress Financial Center Renewal/Expansion 12,851 Cypress Creek

Rissman Barrett Bayview Corporate Center New 10,161 Cypress Creek

* Avison Young handled this transaction

Significant Second Quarter 2018 Sales Transactions - Sorted by Sale Price

Property SF Sale Price Price/SF Buyer Submarket

Sawgrass Commerce Center 153,188 $27,625,000 $180 IP Capital Partners Sawgrass Park

One Charter Place 231,500 $21,150,000 $91 Groupe Petra NW Broward

avisonyoung.com
© 2018 Avison Young - Florida, LLC. All rights reserved. E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be
correct, is not guaranteed by Avison Young.
 Broward County Office Market Report
Second Quarter
Orlando 2018
Office Market Report Year-End 2017

Contact Information
Boca
R ato n
808
Greg Martin
Principal
500 W Cypress Creek Rd., Suite 350
PALM BEACH COUNTY Fort Lauderdale, FL 33309
BROWARD COUNTY
H illsb oro 954.903.1815
Park la nd Pin es
SUBMARKETS
810
D e e r fi e ld greg.martin@avisonyoung.com
B e a ch

NW BROWARD NE BROWARD 869

Co conu t H ills b oro David Duckworth
Cre e k
PLANTATION CYPRESS CREEK
Co ra l
Springs
B e a ch Principal
834 Lighthou s e 500 W Cypress Creek Rd., Suite 350
Point
SAWGRASS DOWNTOWN Fort Lauderdale, FL 33309
FORT LAUDERDALE 441 845
1
869 7 95 954.903.1815
SW BROWARD CENTRAL BROWARD
M a rgate
Pomp a no
B e a ch
david.duckworth@avisonyoung.com
HOLLYWOOD HALLANDALE 814
814
Lisa McNatt
Ta m a ra c 817 Nor th A1A Director of Research
L a u de rda le
S e a R a nch 135 W Central Blvd, Suite 700
L a ke s
870
Orlando, FL 32801
870 L a u de rda le - 813.444.0606
Oa k la nd by- the - S e a
L aud erd ale Pa rk lisa.mcnatt@avisonyoung.com
L a u d e rhill L akes
816 Wilton
869 Sunrise M a nors
441 845

838 7
Ro osevelt
G ard en s Broward Office Team
838
P l a nt at i o n Wash in gton Fo r t
842
Park
95 L a u d e rd a l e Justin Cope
817
B oulevard
G ard en s
Vice President
We sto n 595
1 954.903.3701
Broad view
Park
84
823 D av i e Lisa Hernandez
Ft Lauderdale-
Hollywood
Associate
818
Int’l Airport
954.903.3703
818
Co o p e r D a nia
Ci t y B e a ch
S o u t hwe s t
Ranches 848
27
75
822
Holly wo o d
Pe m b ro ke
Pi n e s
820
1 A1A
817
Pe mb roke
Pa rk Ha lla nda le
M i ra m a r B e a ch
858 We s t Pa rk
821 441 G olde n
7 Ave ntu ra B e a ch
BROWARD COUNTY
854 95 Oj u s 856
MIAMI-DADE COUNTY
823 Miami
Co u nt r y
G a rd e n s Nor th M ia mi Su nny
821 Cl u b
B e a ch Is le s
826 826 B e a ch

avisonyoung.com
© 2018 Avison Young - Florida, LLC. All rights reserved. E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be
correct, is not guaranteed by Avison Young.